New York (CNN Business) Payless is going out of business and will close all of its 2,100 US stores. DSW had a miserable holiday season, but it has developed a strategy to avoid Payless' fate.

DSW's DSW DSW's strong sales during November, December and January came at the expense of profit, the company reported Tuesday. DSW posted its fifth straight quarter of comparable sales growth, but the company lost nearly $46 million over the holiday period, because it had to run promotions to clear out its merchandise.stock tumbled 15% after the company posted a surprise loss during the quarter.

Despite the rocky holiday, the shoe chain has tried to adapt to disruptive changes in the industry and learn new tricks to stay relevant with shoppers. Nail salons in stores, a revamped loyalty program and kids' shoe sections are boosting DSW.

DSW has looked for different ways to expand its brand with its core women customers. Women's shoes make up 69% of DSW's more than $3 billion in sales.

"They've done a very good job over the past couple of years of really honing in on their customer," said Sam Poser, analyst at Susquehanna Financial Group. "They have a designer customer that wants a good price on some fancy shoes."

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