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DSW's Store Expansion Spree

Zacks Equity Research

With the intention to accomplish its plan of opening 39 new stores in fiscal 2012, footwear retailer DSW Inc. (DSW) recently announced the opening of two more new stores – one in Washington D.C. and another in Wisconsin Avenue Northwest. The new stores will be inaugurated on October 11, 2012 and on October 25, 2012, respectively.

The store to be launched on October 11, 2012 in Washington D.C. will be the company’s fifteenth store in the city; however, this will be the first one to be opened in the main locality of the region. The store will attract more customers and shoe lovers.

The new store covers an area of about more than 20,000 sq ft with two floors, and will in-house around 28,000 pair of designer shoes for men and women signifying the strong demand for DSW’s designer shoes.

Management remains confident with the opening of the new store in Washington D.C. and believes that the city will soon become a coveted destination for shoe lovers.

With an objective to attract more customers, DSW runs a free, award-winning loyalty program ‘DSW Rewards,’ which issues certificates to the customers for future purchases at DSW. Moreover, customers receive member-only offers through this loyalty program.

The company’s store expansion strategy is expected to be accretive to its top-line growth, since it offers a wide range of designer shoes at discounted prices for both men and women. DSW’s wedding shop collection provides exclusive assortments for bridal parties and occasions.

Columbus, Ohio-based DSW Inc. currently operates 352 stores in 41 states and also supplies footwear to 344 leased locations in the U.S. It also runs an e-commerce site www.dsw.com and a mobile website m.dsw.com.

DSW, which competes with J. C. Penney Company Inc. (JCP) currently carries a Zacks #2 Rank, implying short term Buy rating on the stock  for the next 1-3 months, on the back of rising earnings momentum over the last four quarters.

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