Even though it might seem like everyone is doing most of their shopping online these days, that’s not even close to true: 81.5% of U.S. retail sales are brick-and-mortar, according to a January 2026 Capital One Shopping report.
Some items are easier to shop for online than others. What you see is what you get when it comes to household supplies, electronics, and books. Clothes and shoes are not always so straightforward, and I almost never buy them online because I often have to return them for fit or quality issues.
I didn’t always feel that way. I remember the first time I ordered shoes from Zappos: Being able to browse their endless selection of sandals and sneakers, and have them on my doorstep a day or two later in multiple sizes, was amazing. So was the free return policy.
After a few experiences, though, I learned I’d much rather try on shoes before buying them. These days, bustling DSWs are the places I look first for shoes.
Yet despite seemingly healthy store activity, Designer Brands, the parent company of footwear retailer DSW, has confirmed layoffs this week. The company is working to streamline operations and navigate a challenging retail environment marked by cautious consumer spending.
The caution is especially noticeable among “lower- and middle-income households,” said the National Retail Federation.
Designer Brands did not disclose how many employees were affected or which departments were impacted.
“We took actions to simplify our organizational structure, reduce complexity, and improve speed and accountability,” a company spokesperson told Retail Dive.
“These changes strengthen our ability to execute, manage costs, and create long-term value for our customers, our teams and our business. Unfortunately, this means some associates were impacted. These are difficult decisions.”
The layoffs come as many retailers continue to face uneven demand for discretionary items from consumers who remain under pressure from higher everyday costs, including food, utilities, and rent.
Footwear has been one of the more volatile categories in retail over the past year. Although higher-income consumers have continued to spend, middle-income households have grown more selective, and lower-income shoppers have pulled back on nonessential purchases.
That trend has shown up across the retail landscape, including at mass merchants. Walmart executives have previously said the retailer continues to benefit from higher-income families shopping more frequently, while lower-income households face mounting financial pressure, Observer reported. This dynamic that has reshaped spending patterns across categories.
For specialty retailers such as DSW, those shifts can be especially difficult. Shoes are often a discretionary purchase, and consumers may delay buying new pairs unless driven by necessity or promotions.
At its December 9, 2025, earnings report, the company announced that net sales had decreased 3.2% to $752.4 million.
“Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics,” Chief Executive Officer Doug Howe said in an announcement.
“Stronger consumer demand and improved in-store execution drove improved comparable sales in the third quarter compared to the second quarter,” he added. “Our team also delivered a meaningful increase in gross profit and diligently managed expenses, which helped drive an increase in operating income over last year.”
Designer Brands has been working to simplify its business and focus on areas with the strongest returns. The company operates hundreds of DSW stores across the U.S. and Canada, along with a growing digital business and a portfolio of owned brands.
Management has signaled that efficiency and discipline are priorities, particularly as the company balances store operations, e-commerce investments, and inventory management. Streamlining the corporate structure through layoffs is a familiar step for retailers looking to protect margins during slower sales periods.
While the company has not announced new large-scale store closures alongside the layoffs, the move suggests Designer Brands is taking a cautious approach as it looks ahead to the rest of the fiscal year.
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Over the past year, several apparel, footwear, and home-goods retailers have cut corporate jobs or reorganized teams to reduce expenses. In many cases, companies have emphasized that the moves are proactive rather than reactive — aimed at preserving flexibility if consumer demand weakens further.
Fashion retailers including Nike, Puma, Saks Global, and Target, among others, have been cutting jobs as part of a larger trend across corporate America and beyond, reported WWD in November 2025. At the time of the WWD reporting, there had been 17,267 job cuts among fashion retailers for the year.
Designer Brands is far from alone, as layoffs have become increasingly common across retail and consumer-facing industries. As companies respond to slower sales growth, higher labor costs, and lingering inflation pressures, one of the first things they trim is staff.
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Catalyst Brands, the parent company that operates JCPenney, Aéropostale, Brooks Brothers, Nautica, and Lucky Brand, announced layoffs affecting about 250 corporate employees (roughly 5% of staff), reported Fashion Dive.
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Carter’s closed about 150 children’s apparel stores and reduced its office staff by roughly 15% as part of efforts to cut costs and improve profitability, per Fox News Live Now.
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Kohl’s cut about 10% of its corporate workforce as part of a broader restructuring effort while also closing underperforming stores, Forbes reported.
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Macy’s announced closure plans for dozens of underperforming stores, a move that led to layoffs as part of its turnaround strategy, according to Newsweek.
A majority share of consumers (45%) still shop primarily in stores, according to Capitol One Shopping.
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64% of Americans shop in stores on a weekly basis.
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18.5% of U.S. retail sales come from e-commerce.
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Americans spent $1.337 trillion online in 2024.
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In-store sales total $5.927 trillion.
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27% of consumers are hybrid shoppers, buying online and in stores in equal shares.
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Online retail sales increased dramatically after the Covid pandemic, averaging 9.47% annual growth between 2022 and 2025.
For investors, the key questions are whether Designer Brands can stabilize sales without resorting to deeper cost cuts, and how effectively it can compete in an increasingly promotion-driven market.
On the company’s Q3 2025 earnings call, Designer Brands reported comparable sales were down 2.4%. The company further reported:
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Gross profit: $339.6 million, with gross margin expanding to 45.1%
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Net income: $18.2 million, or $0.35 diluted EPS
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Adjusted net income: $19.6 million, or $0.38 adjusted diluted EPS
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Cash and equivalents: $51.4 million (up from $36.2 million year-ago)
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Debt: $469.8 million (down from $536.3 million)
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Inventory: $620.0 million (down from $637.0 million)
The company historically reports its Q4 earnings in March, but the 2026 date has not been announced. That report will offer clearer insight into whether the company’s streamlining efforts are translating into improved margins or steadier cash flow.
Any changes to store strategy, pricing, or inventory levels could also signal how management views the health of the footwear market heading into the next shopping cycle.
For now, the layoffs underscore a reality many retailers are facing: Even well-known brands are being forced to tighten operations as consumer spending remains uneven.
Related: Costco solves problem that plagues Walmart and Target
This story was originally published by TheStreet on Feb 8, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
