FINANCE

DSW and Authentic Brands Group to acquire Camuto Group

BY Marianne Wilson

Footwear retailer DSW is expanding its portfolio.

The footwear retailer is partnering with brand development, marketing and entertainment company Authentic Brands Group to acquire Camuto Group in a deal valued at about $375 million. Under the terms of the agreement, DSW will acquire the operations of Camuto Group, which is best know for its namesake Vince Camuto brand and as the footwear licenses of Jessica Simpson, and Lucky Brand’s and Max Studio’s footwear and handbags.

DSW will contribute approximately $200 million to acquire all of Camuto Group’s global production, sourcing and design infrastructure, including operations in Brazil and China, a new, state-of-the-art distribution center in New Jersey, in addition to existing working capital of approximately $100 million. The company will also acquire the licensing rights for the Jessica Simpson footwear business, as well as the footwear and handbag licenses for Lucky Brand and Max Studio, and acquire joint venture participation in the ED Ellen DeGeneres and Mercedes Castillo brands currently managed by the Camuto Group.

“The acquisition of Camuto Group is an exciting new growth opportunity for our company,” said DSW CEO Roger Rawlins. “We recently expanded our customer reach in North America through our Canadian retail subsidiary, and this partnership transforms DSW Inc. into one of the largest footwear companies in North America with industry-leading capabilities in product design, development, sourcing, production and marketing. With our expertise and infrastructure, we’re confident this partnership will expand our platform to pursue new market share opportunities and become integral to more consumer purchase decisions.”

Additionally, DSW will team up with Authentic Brands to acquire the intellectual property rights of Camuto Group’s proprietary brands under a new partnership, with Authentic Brands taking the majority stake of 60% in the joint venture. DSW will acquire a 40% stake (for $56 million). The partnership will focus on licensing the brands across existing lines in footwear, handbags and jewelry, and new category development with a focus on building out each brand’s lifestyle offerings. Authentic Brands will be responsible for the development, growth and global marketing of the brands.

With the move, ABG takes a page from its acquisition playbook for Aéropostale and Nautica, creating a similar structure that secures a dedicated operating partner in footwear.

“This strategic arrangement preserves the Camuto Group operation, which will continue to service its current footwear partners, and provides a robust infrastructure for new brands and growth,” said Jamie Salter, chairman and CEO of ABG. “In addition, our partnership with DSW links ABG to a footwear authority whose sourcing and manufacturing expertise will extend across our portfolio.”

Under the terms of the transaction, Camuto will maintain its Connecticut headquarters and will manage its dedicated wholesale and third-party design relationships independently of DSW’s retail business. Camuto Group CEO Alex Del Cielo will continue to lead the company.

“The partnership with DSW and ABG creates an unmatched opportunity for the Camuto Group to expand the platform for our leading lifestyle brands,” said Del Cielo. “Having collaborated with DSW for many years, we respect their ability to grow a business through strategic leadership and innovation. By leveraging DSW Inc.’s resources, we will strengthen our wholesale business and bring to market an exciting and world-class direct-to-consumer experience that will grow our brand equity and customer demand across additional points of sale.”

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