8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 4, 2023

Designer Brands Inc.

(Exact name of registrant as specified in its charter)

Ohio	001-32545	31-0746639
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

810 DSW Drive, Columbus, Ohio	43219
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (614) 237-7100

 N/A

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Shares, without par value	DBI	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act.    ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Planned CEO Succession

On January 5, 2023, Designer Brands Inc. (the "Company") announced a planned succession process relating to the Company's Chief Executive Officer ("CEO") role. On January 4, 2023, the Company's Board of Directors (the "Board") approved a CEO transition, whereby the Company’s current CEO, Roger Rawlins, will step down from his role as CEO and as a member of the Board effective April 1, 2023, or such earlier date as determined by the Board, (the "Effective Date") at which time Doug Howe, who currently serves as the Company’s Executive Vice President and President of DSW Designer Shoe Warehouse, will assume the CEO role and join the Board as a Class II director. To assist in facilitating a smooth transition, Mr. Rawlins will serve as a strategic advisor to the Company and the Board for a 12-month period following the Effective Date, as further described below.

Rawlins Transition and Consulting Agreement

On January 4, 2023, the Board approved a Transition and Consulting Agreement (the "Transition Agreement") between the Company and Mr. Rawlins, which provides for benefits that are consistent with those that Mr. Rawlins would be entitled to in the event of a termination by the Company without Cause (as defined in the Executive Agreement) under the Amended and Restated Standard Executive Severance Agreement, by and between Mr. Rawlins and the Company, dated as of December 6, 2019 ("Executive Agreement"). The Company and Mr. Rawlins executed the Transition Agreement on January 4, 2023, which will become effective if Mr. Rawlins does not revoke the Transition Agreement during the seven-day revocation period. Pursuant to the terms of the Transition Agreement, Mr. Rawlins will be entitled to the following payments:

•Cash payments in an aggregate amount of $1,950,000, payable in payroll installments over an 18-month period following the Effective Date (the "Payment Period"), provided that if Mr. Rawlins becomes employed by another company during the Payment Period, such cash payments will be reduced by 50% over the remaining term of the Payment Period;

•A cash payment amount equivalent to 1.5 times the cash incentive bonus that Mr. Rawlins would have received under the Designer Brands Inc. 2005 Cash Incentive Compensation Plan ("ICP") for the performance period in which the Effective Date occurs, based on actual Company performance through the end of the performance period as determined by the Compensation Committee of the Board, payable on the date ICP awards are paid to active participants; and

•Reimbursement for the cost of continuing health coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") for up to 18 months following the Effective Date, less the employee premium for health coverage, which shall cease if Mr. Rawlins becomes eligible for substantially comparable coverage under another benefit plan.

Consistent with the provisions of the Executive Agreement applicable to a termination by the Company without Cause, the Transition Agreement sets forth the treatment of Mr. Rawlins' outstanding equity awards, as follows:

•Any nonqualified stock options that are vested on the Effective Date will remain exercisable until the earlier of 90 days following the Effective Date or the original grant date expiration date, subject to the trading rules set forth in the Company’s policies and procedures, including the Designer Brands Inc. Insider Trading Policy; and

•Outstanding time-based restricted stock unit awards will become vested on the Effective Date with respect to the portion of the awards that have scheduled vesting dates occurring during the Payment Period.

The cash payments and equity award vesting described above are referred to collectively herein as the "Transition Amounts."

Payment of the Transition Amounts is subject to Mr. Rawlins' execution and non-revocation of a release and waiver of claims in favor of the Company and his compliance with certain restrictive covenants, including, without limitation, non-competition, non-solicitation, confidentiality, intellectual property assignment, cooperation, and non-disparagement obligations. Additionally, if at any time between January 4, 2023 and the Effective Date, (i) the Company terminates Mr. Rawlins' employment for Cause or (ii) Mr. Rawlins voluntarily terminates his employment, Mr. Rawlins will not be entitled to receive the Transition Payments.

Under the Transition Agreement, for a 12-month period following the Effective Date, Mr. Rawlins will provide consulting advice and assistance to the Board and the Company, in order to facilitate a seamless transition with respect to Mr. Howe's succession as CEO. Mr. Rawlins will not receive any additional compensation for such services as a consultant and advisor.

The foregoing summary of the Transition Agreement is qualified in its entirety by reference to the full text of the Transition Agreement, which will be filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ending January 28, 2023. The foregoing summary of the Executive Agreement is qualified in its entirety by reference to the full text of the Executive Agreement, which was previously filed on December 10, 2019 by the Company with the Securities and Exchange Commission as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the fiscal quarter ended November 2, 2019 and is incorporated herein by reference.

New CEO Appointment and Compensation

On January 4, 2023, the Board appointed Doug M. Howe as the Company's Chief Executive Officer and as a Class II director of the Board, with such appointments to be effective as of the Effective Date (the "Appointments").

Since May 2022, Mr. Howe, 62, has served as President of DSW Designer Shoe Warehouse and Executive Vice President of the Company. Prior to joining the Company, Mr. Howe was the Chief Merchandising Officer of Kohls Corp. from May 2018 to May 2022. From 2008 until 2018, Mr. Howe served in a variety of roles at Qurate Retail Group, including as EVP, Chief Merchandising Officer where he was responsible for leading QVC's and HSN's product leadership agenda. Mr. Howe is a graduate of Creighton University with a degree in business administration and management.

There are no family relationships between Mr. Howe and any director or executive officer of the Company, and the Company has not entered into any transactions with Mr. Howe that are reportable pursuant to Item 404(a) of Regulation S-K. Other than as described herein, there are no arrangements or understandings between Mr. Howe and any other persons pursuant to which he was selected as the Company's Chief Executive Officer or as a Class II director.

In connection with the Appointments and beginning on the Effective Date, Mr. Howe's annual base salary will be increased from $1,100,000 to $1,200,000. Mr. Howe's target bonus under the Company’s ICP remains unchanged at 150% of his annual base salary. Additionally, Mr. Howe will receive an annual equity award with an aggregate target value of $4,500,000, which is expected to consist of performance shares (50%) and restricted stock units (50%), and the vesting of which is subject to continued service for the Company, and the terms and conditions of the applicable award agreements.

Mr. Howe and the Company also have entered into an Amended Executive Severance Agreement (the "Severance Agreement") that provides for payments and benefits following termination of Mr. Howe's employment without "cause" (as defined in the Severance Agreement). Pursuant to the terms of the Severance Agreement, if the Company involuntarily terminates Mr. Howe’s employment without "cause," he is entitled to receive: (i) salary continuation for an 18-month period, based on his salary as of the date of termination; (ii) a pro-rata share of any annual cash incentive bonus paid for performance in the fiscal year in which the termination occurs; (iii) 18 months of accelerated vesting with respect to outstanding stock options, time-based restricted stock units, and performance shares; and (iv) reimbursement for the cost of maintaining continuing health coverage under COBRA for a period of up to 18 months following the date of termination, less the employee premium for health coverage.

The foregoing summary of the Severance Agreement is qualified in its entirety by reference to the full text of the Separation Agreement, which will be filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ending January 28, 2023.

Item 7.01    Regulation FD Disclosure.

A copy of the Company’s press release announcing the Separation and the Appointment to the Board has been furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this report furnished pursuant to Item 7.01, including Exhibit 99.1 attached hereto, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, if such subsequent filing specifically references the information furnished pursuant to Item 7.01 of this report.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release of Designer Brands Inc., dated January 5, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  

			Designer Brands Inc.
		By:	/s/ Michelle C. Krall
			Michelle C. Krall
			Senior Vice President, General Counsel and Secretary
Date:	January 5, 2023

EX-99.1

Exhibit 99.1

Designer Brands Inc. Announces Planned CEO Transition, Reiterates Fiscal 2022 Guidance

Doug Howe, DSW President, to Succeed Roger Rawlins as CEO of Designer Brands Inc. Effective April 1, 2023

Rawlins to Serve as Strategic Advisor through March 2024

COLUMBUS, Ohio, January 5, 2023 - Designer Brands Inc. (NYSE: DBI) (the "Company" or "Designer Brands"), one of the world's largest designers, producers and retailers of footwear and accessories, today announced a planned CEO transition process. The Company's Board of Directors (the "Board of Directors" or the "Board") has appointed Doug Howe, President of DSW, to succeed Roger Rawlins as the Company's Chief Executive Officer, effective April 1, 2023, at which time Rawlins will step down as Chief Executive Officer and as a member of the Board of Directors. Rawlins will continue to work with the Company for a twelve-month period in a Strategic Advisor role to facilitate a seamless leadership transition. This transition is the direct result of the Board of Directors' long-term succession planning with respect to the CEO role.

"On behalf of the Board of Directors, I want to thank Roger for his leadership and unparalleled commitment to Designer Brands over the past 17 years," said Jay Schottenstein, Executive Chairman of Designer Brands' Board of Directors. "Roger has been at the forefront of Designer Brands' transformation from a shoe retailer to a brand builder. From launching DSW.com, which now accounts for over $1 billion in demand, to leading the acquisition of our Canadian operations and integrating a world-class design, sourcing and wholesale business, Roger has been instrumental in leading Designer Brands and has set us up for success in achieving our long-range plan. As a result of a comprehensive succession plan, we are pleased to appoint Doug, a strategic thinker with demonstrated history of driving results in the industry, to CEO. His experience across brand building, including merchandising, marketing, design, development, and planning give him the expertise needed to lead this next phase of Designer Brands' growth. The Board is looking forward to continuing this brand building journey with Doug's leadership, and we are very excited for this next chapter."

"I am honored to lead such a visionary team at Designer Brands, and I greatly appreciate the support of Roger, the executive leadership team and the Board," said Doug Howe. "I am focused on continuing to execute on the long-range plan the team laid out at our 2022 Investor Day to double the sales of our Owned Brands and maintain the sales of our National Brands, all while delivering with incredible speed and quality. I look forward to continuing to work with the leadership team, the Board, and our associates to further our strategy and grow even stronger as an organization."

Howe has more than 30 years of experience in the retail industry with deep experience in vertical brand and direct-to-consumer growth and currently serves as President of DSW and Executive Vice President of Designer Brands. Doug also has extensive background working across digital retail channels, department stores, and mass retailers. Howe joined the Company in May 2022, after four years as Chief Merchandising Officer at Kohl's, where he was responsible for buying, planning, product design and development, sourcing, and merchandising transformation efforts. Prior to Kohl's, he was the Global Chief Merchandising Officer at Qurate Retail Group, leading QVC's and HSN's product leadership agenda by identifying emerging trends and white spaces for growth, building brands through their discovery, introduction and cultivation, developing category strategies, and attracting top vendors. Doug also held leadership roles at Gap Inc. including product design and development of vertical brands, various merchandise leadership roles at Walmart, including SVP of Product Development, Strategy, Design and Development, and several senior merchandising positions at May Department Stores.

With Doug and Roger's assistance, management will conduct a comprehensive search to identify the next President of DSW.

"I want to thank Jay and Joey Schottenstein and our Board of Directors for the opportunity provided to me to lead this outstanding organization. It has been a privilege to lead Designer Brands on its journey to becoming a brand builder, and I am confident in Doug's experience, leadership and commitment to continue that path," said Roger Rawlins. "After 17 years with this organization and seven years as CEO, I am proud of the company we have built, pleased with our accomplishments, and humbled by the fantastic team with whom I've had the honor of working."

Reiterating Fiscal 2022 Financial Outlook

Also on January 5, 2023, the Company reiterated its fiscal 2022 financial guidance that was provided in connection with the third quarter 2022 financial results for the full 2022 fiscal year:

Metric	Current Guidance
Designer Brands Comparable Sales Growth	Mid-single digits
Diluted EPS	$1.75 - $1.80

About Designer Brands

Designer Brands is one of the world's largest designers, producers and retailers of the most recognizable footwear brands and accessories, transforming and defining the footwear industry by inspiring self-expression across every facet of its enterprise. Through its portfolio of world-class owned brands, led by the industry-setting Vince Camuto brand, Designer Brands delivers on-trend footwear and accessories through its robust direct-to-consumer omni-channel infrastructure, featuring a billion-dollar digital commerce business and nearly 650 stores across the U.S. and Canada. Its retailing operations under the DSW Designer Shoe Warehouse and The Shoe Company banners deliver current, in-line footwear and accessories from most of the largest national brands in the industry and hold leading market share positions in key product categories across Women's, Men's and Kid's in the U.S. and Canada. Designer Brands also distributes its owned brands through select wholesale relationships while leveraging its design and sourcing expertise to build private label product for national retailers. Designer Brands is also committed to being a difference maker in the world, taking steps forward to advance diversity, equity, and inclusion in the footwear industry and supporting our global community and the health of our planet through donating more than six million pairs of shoes to the global non-profit Soles4Souls. More information can be found at www.designerbrands.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements in this press release may constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "could," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. These statements include, without limitation, statements regarding leadership changes and the proposed benefits thereof, the objectives and plans of management, the execution of and benefits relating to the Company's long-range plan and strategy, and the Company's

financial forecasts. Such statements are based on the Company's current views and expectations and involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: risks and uncertainties related to the ongoing coronavirus ("COVID-19") pandemic, any future COVID-19 resurgence, and any other adverse public health developments; risks that recent inflationary pressures, including higher freight costs, could have on our results of operations and customer demand based on pricing actions and operating measures taken to mitigate the impact of inflation; uncertain general economic conditions, including inflation and supply chain pressures, domestic and global political and social conditions and the potential impact of geopolitical turmoil or conflict, and the related impacts to consumer discretionary spending; our ability to execute on our long-term strategic plans; our ability to anticipate and respond to fashion trends, consumer preferences, and changing customer expectations; our ability to maintain strong relationships with our vendors, manufacturers, licensors, and retailer customers; risks related to losses or disruptions associated with our distribution systems, including our distribution centers and fulfillment center and stores, whether as a result of the COVID-19 pandemic, reliance on third-party providers, or otherwise; our reliance on our loyalty programs and marketing to drive traffic, sales, and customer loyalty; risks related to cyber security threats and privacy or data security breaches or the potential loss or disruption of our information systems; our ability to protect our reputation and to maintain the brands we license; our competitiveness with respect to style, price, brand availability, and customer service; risks related to our international operations, including international trade, our reliance on foreign sources for merchandise, exposure to political, economic, operational, and compliance and other risks, and fluctuations in foreign currency exchange rates; our ability to comply with privacy laws and regulations, as well as other legal obligations; risks associated with climate change and other corporate responsibility issues; and uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation. Risks and other factors that could cause our actual results to differ materially from our forward-looking statements are described in the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2022 and in our other filings with the Securities and Exchange Commission. All forward-looking statements speak only as of the time when made. Except as may be required by law, the Company undertakes no obligation to update or revise the forward-looking statements included in this press release to reflect any future events or circumstances.

CONTACT

Investor Relations

Edelman Smithfield for Designer Brands Inc.,

Stacy Turnof, DesignerBrandsIR@edelman.com

Financial Media

Edelman Smithfield for Designer Brands Inc.,

Ashley Firlan, DesignerBrandsIR@edelman.com

XML

Document and Entity Information Document	Jan. 05, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jan. 04, 2023
Entity Registrant Name	Designer Brands Inc.
Entity Incorporation, State or Country Code	OH
Entity File Number	001-32545
Entity Tax Identification Number	31-0746639
Entity Address, Postal Zip Code	43219
Local Phone Number	237-7100
City Area Code	614
Pre-commencement Tender Offer	false
Soliciting Material	false
Written Communications	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Shares, without par value
Trading Symbol	DBI
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001319947
Amendment Flag	false
Entity Address, Address Line One	810 DSW Drive
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH