DBG announces plans to open 50 retail stores

Digital Brands Group, Inc. (DBG) has announced plans to open 50 retail stores over the next several years, with the first location slated to open in March.

Consisting of a curated collection of luxury lifestyle, digital-first brands, including Sundry, DSTLD, and Harper & Jones, the company aims to fund its retail expansion strategy with its internal free cash flow.

The first store to open will be an outlet for its recently acquired brand Sundry, as the company plans to use this store for offloading surplus inventory, achieving higher margins than off-price sales. "We started with an outlet location due to the finished goods inventory that is already paid for and sitting at our warehouse, as well as the historical metrics and performance of this store," said Hil Davis, chief executive officer of Digital Brands Group, in a statement.

DBG revealed that it has been reviewing store locations and leases with a number of large-scale retail developers over the past few months. Based on store metrics in these locations, DBG forecasts over 1.5 million USD per store, or 75 million USD in annual revenues across the entire store fleet of 50 stores.

"We are excited to announce the retail store phase of our growth strategy," continued Davis. "We believe the best-performing retail brands will have three legs to their growth story: (1) wholesale, (2) e-commerce, and (3) retail stores. We believe these stores will also drive revenue in our wholesale and e-commerce channels based on data from other brands who have opened retail stores."

The retail strategy comes as DBG aims to drive "significant brand awareness," as the company believes the store openings will lower the cost of customer acquisition and lead to higher average basket size and stronger customer retention.