BUSINESS OPERATIONS

DSW Inc., an Ohio corporation, together with its wholly-owned subsidiaries, is the destination for fabulous footwear brands and accessories at a great value every single day. We offer a wide assortment of brand name dress, casual and athletic footwear and accessories for women, men and kids. We conduct business in two reportable segments: the DSW segment ("DSW"), which includes DSW stores and dsw.com, and the Affiliated Business Group ("ABG") segment.

DSW separates its merchandise into three primary categories: women's footwear; men's footwear; and accessories and other (which includes kids' footwear). Previously, athletic footwear was shown as its own category and is now included in women's footwear and men's footwear, which reflects how our categories are presented in stores. The following table sets forth the approximate percentages of DSW segment sales attributable to each merchandise category:



	Fiscal
Category	2016	2015	2014
Women's footwear	69%	69%	69%
Men's footwear	22%	22%	22%
Accessories and other	9%	9%	9%

The ABG segment partners with three other retailers to help build and optimize their in-store and online footwear businesses. ABG supplies merchandise for the shoe departments for Stein Mart, Gordmans, and Frugal Fannie's.

We also have an equity investment in Town Shoes Limited ("Town Shoes"). Town Shoes is the market leader in branded footwear in Canada, primarily under The Shoe Company, Shoe Warehouse, Town Shoes and DSW banners, as well as an e-commerce site. As of January 28, 2017, there are 23 DSW Designer Shoe Warehouse stores in Canada operated under a licensing agreement.

We completed several transactions that supported our efforts to grow market share within footwear and accessories domestically and internationally. On March 4, 2016, we acquired Ebuys, Inc. ("Ebuys"), a leading off price footwear and accessories retailer operating in digital marketplaces. Ebuys sells products to customers located in North America, Europe, Australia and Asia. On August 2, 2016, we signed an agreement with the Apparel Group as an exclusive franchise partner in the Gulf Coast region of the Middle East. The agreement will expand the DSW banner by up to 40 stores across the territory with the first stores planned to open in fiscal 2017.

Our fiscal year ends on the Saturday nearest to January 31. The periods presented in these financial statements are the fiscal years ended January 28, 2017 ("fiscal 2016"), January 30, 2016 ("fiscal 2015") and January 31, 2015 ("fiscal 2014"). Fiscal 2016, 2015 and 2014 each consisted of 52 weeks. Our next fiscal year ending February 3, 2018 ("fiscal 2017") will consist of 53 weeks. Unless otherwise stated, references to years in this report relate to fiscal years rather than calendar years.