North American footwear retailer DSW and Authentic Brands Group have finalized a deal to acquire Camuto Group, which produces footwear under the Vince Camuto, Louise et Cie, Enzo Angiolini brands, and Lucky and Jessica Simpson licenses.
The $341 million acquisition, which was announced in early October, was completed Tuesday and will see DSW take on all of Camuto Group’s global production, sourcing and design infrastructure. This includes operations in Brazil and China along with Camuto Group’s “state-of-the-art” distribution center in New Jersey. DSW and ABG will also acquire many of the Camuto Group’s IP rights as part of the new partnership.
“Our DSW, Shoe Company, Shoe Warehouse and leased footwear businesses have been steadily gaining market share through store expansion and comparable sales growth, and we’ve had recent successes in innovating experiences and service offerings,” DSW Inc. CFO Roger Rawlins said in a statement. “However, to ensure the health of our business for years to come, we needed to think in the long-term and set a course for greater market share by owning a design and sourcing infrastructure to gain greater control of our product assortment.”
Rawlins said the acquisition would lead to more transactions in new points of sale and add “brand-owned direct-to-consumer” capabilities to its retail network. DSW already operates over 500 stores in the U.S. and says it will become one of the largest North American footwear companies once Camuto Group’s assets are added to the balance sheet.
DSW will pay $238 million of the total acquisition price, contributing $181 million for the working capital, assets and operations of Camuto Group’s day-to-day business.
The remaining $57 million will be used to purchase 40 percent of Camuto Group’s intellectual property assets, of which ABG will now have controlling interest. DSW will pay royalties to ABG based off Camuto Group brand sales while recouping “a healthy portion” of those same royalties due to its minority stake.
Additionally, DSW already stocks Camuto Group products and can immediately begin collecting the wholesale margin for its footwear sales. DSW estimates that its exclusive brands business will grow to $1 billion in annual retail sales with the acquisition.
Authentic Brands Group, for its part, has been on a buying spree—purchasing Nine West, Nautica and now Camuto Group in the past year. The most recent data put out by the group showed $7.6 billion in annual retail sales among 4,606 stores and powered by 33 brands. Now, it says, the Camuto Group purchase will increase that number to more than $8.7 billion worldwide.
“As one of our largest multi-brand acquisitions to date, the addition of the Camuto Group portfolio significantly grows ABG’s stake in the footwear and accessories market,” Jamie Salter, chairman and CEO of ABG said. “We see incredible opportunity for expansion, both from a category and distribution standpoint, and plan to leverage our international expertise and network of best-in-class partners to propel these iconic brands into their next phase of global growth.”
ABG will oversee the expansion of licensing and the “marketing, business development and licensing function” for Camuto Group’s brands.
Camuto Group had been under duress since the passing of its founder and namesake, Vince Camuto, in 2015. After opening up a distribution center that has seen its fair share of troubles and hiring consultants from the Clear Thinking Group to help review and revive its business model, Camuto Group CEO, Alex Del Cielo, says the move will strengthen wholesale business and, better yet, return the organization to “a state of fully flexible liquidity.”
“The partnership with DSW and ABG creates an unmatched opportunity for the Camuto Group to expand the platform for our leading lifestyle brands,” Del Cielo said in an October press release announcing the acquisition. “Having collaborated with DSW for many years, we respect their ability to grow a business through strategic leadership and innovation.”
Del Cielo will continue to lead the organization after the sale and the Camuto Group will maintain its Connecticut headquarters for the foreseeable future.