Digital Brands Group (DBG) – a luxury lifestyle and digital brand company – is expanding offline, with plans to open 50 retail stores over the next few years.

The company has finalized the store locations and leases with multiple large-scale retail developers, and its internal free cash flow will fund the retail store expansion.

DBG aims to use its retail stores to clear excess inventory at a higher margin than selling into the off-price channel. It also expects the stores to drive significant brand awareness, customer acquisition, average basket size, and customer retention, resulting in lower costs.

The company’s recent acquisition of Sundry has provided the company with significant excess inventory, which can be sold through the new stores without incurring additional costs.

DBG anticipates the retail stores to generate over $1.5 million in annual revenue and more than $500,000 in annual cash flow, based on historical metrics and performance of this store, and excess Sundry inventory before the acquisition.

With the opening of 50 stores, the company expects the fleet of stores to generate over $75 million annually in revenues and meaningful store-level cash flow.

“We believe the best-performing retail brands will have three legs to their growth story: wholesale, e-commerce, and retail stores,” remarked Hil Davis, CEO of Digital Brands Group. 

“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.”

DGI’s portfolio consists of various brands, including Bailey 44, DSTLD, Stateside, Sundry, and Harper & Jones.