Digital Brands Group, Inc. (DBG) has revealed its strategic initiative to open 50 retail stores over the coming years, with the inaugural location scheduled to commence operations in March. As the parent company of well-known digital-first brands such as Sundry, DSTLD, and Harper & Jones, DBG intends to finance this retail expansion using its internal free cash flow.
The first store set to open will serve as an outlet for the recently acquired brand Sundry, with a focus on offloading surplus inventory to achieve higher margins than traditional off-price sales. Hil Davis, CEO of Digital Brands Group, explained, “We chose an outlet location due to the existing finished goods inventory in our warehouse, as well as the historical success of this store.”
DBG has conducted a thorough review of potential store locations and leases in collaboration with prominent retail developers in recent months. Based on store metrics in these locations, DBG anticipates generating over $1.5 million per store, translating to an annual revenue of $75 million across its entire 50-store fleet.
“We are thrilled to unveil the retail store phase of our growth strategy,” Davis remarked. “We believe that the most successful retail brands will have a three-pronged growth approach: (1) wholesale, (2) e-commerce, and (3) retail stores. These stores, in turn, are expected to drive revenue in our wholesale and e-commerce channels, drawing insights from the success of other brands with retail establishments.”
This retail expansion aligns with DBG’s broader objective to enhance brand awareness significantly. The company envisions that opening these stores will contribute to lowering customer acquisition costs, increasing the average basket size, and fostering stronger customer retention.
