Designer Brands Inc Investor Day Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : Can I go? Maybe just sticking with that and starting high level, the prior decade market share shifts that you kind of led with, how do you see that evolving over the next decade? What are the repercussions for your kind of core third-party brand business? Obviously, your strategy here embeds in it understanding that the DTC brand trend doesn't go anywhere. But kind of how do you see that landscape evolving? And how does that affect your, call it, core legacy business?

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : Great. And that kind of sets up my next question. With -- I was surprised in the sort of the location of inventory close to the consumer that stores were a bigger part of it. How are you thinking about fulfillment from store, I mean, you are a warehouse? There's an opportunity to do that. And then maybe if you could walk through how the economics on some of these partnerships work? I guess in the instance where it's Brand.com come into your store, how that relates to sort of a prior direct inventory buy and then the Hush Puppy arrangement? I know there these are sensitive, but anything you can kind of help us understand what the margin implications of that stuff is?

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : Got you. And then last, kind of moving more granular. Maybe another way of asking the SG&A question. What is the leverage point in the model? You would think that if you're primarily comping on an 18-point higher business, the leverage point probably is negative at that point. I mean, how do you think about -- I guess, the narrative seems to be reinvestment. Is that code for marketing, but you're going to keep marketing in a certain bound? I mean just what is the right way to think about, are you being conservative? Anything to kind of help us understand that.

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : You put M&A up there to your last (inaudible) that might scare people a little bit from that, got miscue some of the past there were to engage?

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : So then, of KPI. The store, the warehouse reimagine, what does that look from a brand standpoint? How many brands are out to box? You talk about going from like [800 to 400 to 500] is just out of vision. And then how many of are those sort of 8 brands that are under exclusive deals?

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : Got it. And if they do get their own traction, you're not averse to wholesaling them? Or...

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : And then you never answered the Hush Puppy question. How does that arrangement work?

Question: Dylan Douglas Carden - William Blair & Company L.L.C., Research Division - Analyst : Just from a -- yes. Anything you can share on that would be appreciated.