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DSW takes over operations of Camuto Group

Nov '18
Courtesy: DSW
Courtesy: DSW
DSW, a North American footwear and accessories retailer, has taken over the operations of Camuto Group, the product design and brand development organisation known for the Vince Camuto brand and the footwear licenses of Jessica Simpson and Lucky Brand. Under the deal, DSW will acquire Camuto Group's global production, sourcing and design infrastructure.

This includes operations in Brazil and China, a new, state-of-the-art distribution centre in New Jersey and a large amount of working capital consisting primarily of fresh branded inventory and accounts receivable.

Additionally, DSW and Authentic Brands Group (ABG), a global brand development, marketing and entertainment company, have completed their acquisition of several intellectual property rights from the Camuto Group under a new partnership. Brands owned through the partnership include Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini and others. The partnership will license the brands across existing lines in footwear, handbags and jewelry to DSW, and across new product categories to non-related parties with a focus on building out each brand's lifestyle offerings. ABG will be responsible for the development, growth and global marketing of the brands in the joint venture. DSW will pay royalties to this new partnership based on the sales of footwear, handbags and jewelry.

Subsequently, given its 40 per cent ownership interest in the partnership, DSW will recoup a healthy portion of these paid royalties as well as earn royalties paid to the partnership from other parties who license the brand names to produce other lifestyle product categories.

"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," says DSW chief executive officer Roger Rawlins. "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. This acquisition allows us to capture more footwear transactions in new points of sale including at our own industry-leading DSW retail network and now in wholesale, brand-owned direct-to-consumer, as well as in licensing and international franchising."

Total consideration paid to the Camuto Group was approximately $341 million. DSW will be responsible for approximately $238 million of the purchase price, which includes $57 million for a 40 per cent stake in the intellectual property of Camuto Group's proprietary brands with Authentic Brands Group taking the majority stake of 60 per cent, and $181 million contribution for Camuto Group's operations, consisting of approximately $60 million of existing working capital, an estimated $35 million of assets associated with Camuto Group's state-of-the-art distribution center and the remaining $86 million purchasing the operations, talent, expertise and experience of Camuto Group

DSW will operate Camuto Group as a separate, standalone business under the current management team led by Alex Del Cielo and will maintain existing customer relationships, partnerships and brand direction, while providing liquidity and operational oversight as Camuto Group stabilises and grows. DSW's support enables Camuto Group to grow the business of its critical wholesale partners.

"We are excited to partner with Camuto Group and Authentic Brands Group on this tremendous opportunity to drive profitable top-line and bottom-line growth at DSW," says Rawlins. "Today marks the beginning of an exciting transformation for our business, as we cast a vision for the future that positions us as one of North America's largest designers, producers and retailers of footwear." (SV)

Fibre2Fashion News Desk – India

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