Designer Brands has been forced to upend its merchandise assortment as people, stuck at home for work and play due to the pandemic, have opted for more casual attire.

With signs of increased demand for boot sales earlier this year, the retailer increased its orders but is now stuck with an excess because that demand waned amid the re-escalation of the pandemic, executives told analysts.

The retailer is faring better with its decision to expand its athleisure assortment to 49 per cent of its offer, up from its usual 28 per cent. It is in the midst of a three-year strategic plan that included the introduction of nail salons and shoe repair services into its stores. That's turning out to be poor timing, as the pandemic's recent upsurge is keeping customers out of stores. The company noted in its release that the "decrease in gross profit was primarily driven by the significant reduction in customer traffic with the continuing impact of COVID-19."

After some recovery at the end of the summer, store traffic is back down around 40 per cent in the current quarter. Meanwhile, Designer Brands, once known as DSW, hasn't had much success shifting sales online, with William Blair analyst Dylan Carden in emailed comments noting that its 3 per cent growth falls behind peers.