Digital Brands Group, a leading operator of digital-first lifestyle brands, is venturing into the realm of physical retail. The company, known for its popular brands Sundry and Bailey 44, has revealed its plans to open 50 stores in the coming years. These expansions will be funded using the company’s internal cash flow.
To prepare for this move, Digital Brands has been actively evaluating potential store locations and negotiating lease agreements with major retail developers. The company has already taken the first step towards physical retail by signing a letter of intent to open its inaugural store, an outlet location, in March.
This strategic foray into physical stores will not only enhance Digital Brands’ brand visibility but also provide unique opportunities for acquiring new customers, increasing the average spend per customer, and fostering customer loyalty. The company believes that its retail stores will lead to a lower cost of acquiring new customers and a higher average spend per customer, ultimately driving revenues across its wholesale and e-commerce channels.
“We are excited to announce the next phase of our growth strategy with the introduction of retail stores,” said Hil Davis, CEO of Digital Brands Group. “We firmly believe that a successful retail brand should have a solid foundation built on three pillars: wholesale, e-commerce, and retail stores. Furthermore, based on data from other brands that have ventured into physical retail, we anticipate a significant impact on our overall revenue.”
Digital Brands has high expectations for its retail stores, projecting that each location will generate over $1.5 million in annual revenue. With a fleet of 50 stores, the company anticipates an annual revenue of more than $75 million, along with substantial store-level cash flow.
The impressive portfolio of Digital Brands encompasses well-known brands such as Bailey 44, DSTLD, Harper & Jones, Stateside, and Sundry. These brands cater to various segments and offer high-quality clothing options for women and men alike.
Guided by its founding principles as a digitally native-first brand, Digital Brands Group leverages customer data and purchase history to curate personalized content and looks for its clientele. This unique business model allows the company to establish a strong presence in customers’ wardrobes.
With this expansion into physical retail, Digital Brands Group is positioning itself as a dominant force in the fashion industry, blending the convenience of online shopping with the immersive experience of visiting brick-and-mortar stores.
Frequently Asked Questions (FAQs):
1. Which brands are owned by Digital Brands Group?
Digital Brands Group boasts an impressive portfolio of brands, including well-known names like Bailey 44, DSTLD, Harper & Jones, Stateside, and Sundry. They offer high-quality clothing for both women and men.
2. How does the company plan to finance the expansion into physical retail?
The company plans to fund the expansion into physical retail using its internal cash flow.
3. What benefits will the expansion into physical stores bring for Digital Brands?
The expansion into physical stores will allow Digital Brands to increase brand visibility and create unique opportunities for customer acquisition, basket size growth, and customer retention. The company believes that its retail stores will result in a lower cost of acquiring new customers and a higher average spend per customer, ultimately driving revenues in its wholesale and e-commerce channels.
4. What are Digital Brands’ expectations for revenue from the retail stores?
Digital Brands expects each store to generate over $1.5 million in annual revenue. With 50 stores, the company foresees annual revenue exceeding $75 million, along with significant store-level cash flow.
5. How does Digital Brands Group utilize customer data in its business model?
Digital Brands Group leverages customer data and purchase history to curate personalized content and looks for its clientele. This unique business model allows the company to establish a strong presence in customers’ wardrobes.
6. How will Digital Brands Group combine online shopping with the in-store experience?
The expansion into physical retail will enable Digital Brands Group to blend the convenience of online shopping with the fully immersive experience of visiting brick-and-mortar stores.
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