DSW grapples with cyber attack, eyes store closures - Columbus Business First bizjournals.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bizjournals.com Daily Mail and Mail on Sunday newspapers.
Dive Brief:
Designer Brands on Wednesday reported that third quarter net sales fell 30.1% year over year to $652.9 million. Online sales rose 3%, executives said during their earnings call, according to a transcript from Seeking Alpha.
Comparable sales fell 30.4%, compared to the 0.3% increase in the year-ago period, according to a company press release. Executives said they will likely end up closing 10% to 15% of the store fleet, which in the U.S. could mean about 50 to 80 of the retailer s 524 locations.
The retailer swung to a $40.6 million net loss in the quarter from $43.5 million in net income a year ago, with an operating loss of $58.6 million, down from operating profit of $56.1 million. Gross profit contracted by $107.7 million to $165.7 million, with gross margin down to 25.4% from 29.3% last year.
Dive Brief:
DSW s e-commerce site lost access to store inventories when a software vendor suffered a ransomware attack during the last two weeks of Q3, Roger Rawlins, CEO of the retailer s parent company Designer Brands, said on a Wednesday earnings call. We effectively lost a portion of our digital sales capabilities for two weeks during our crucial September selling season, Rawlins said. The roughly 13 million units in stores were not visible to customers on the DSW website when the vendor was forced to temporarily shut down.
The shutdown brought DSW s available visible assortment from 13 million units to roughly 1.3 million disrupting the chain s ability to balance inventory between stores and warehouses. DSW has been shipping e-commerce orders from stores throughout the pandemic.