11 Oct DSW And Authentic Brands Group To Acquire Camuto Group
DSW Inc. announced the company has entered into a definitive agreement to acquire the operations of Camuto Group, best known for the Vince Camuto brand and the footwear licenses of Jessica Simpson and Lucky Brand. Additionally, DSW and Authentic Brands Group LLC (ABG) have entered into a definitive agreement to acquire several intellectual property rights from the Camuto Group under a new partnership. Total consideration paid to the Camuto Group will be approximately $375 million.
The Camuto Group will maintain its existing Connecticut headquarters and will manage its dedicated wholesale and third-party design relationships independently of DSW Inc’s retail business. Camuto Group’s Chief Executive Officer Alex Del Cielo will continue to lead the organization.
DSW Inc. Chief Executive Officer Roger Rawlins states, “The acquisition of Camuto Group is an exciting new growth opportunity for our company. 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.”
According to Camuto Group Chief Executive Officer Alex Del Cielo, “The partnership with DSW and ABG creates an unmatched opportunity for the Camuto Group to expand the platform for our leading lifestyle brands. 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.”
“I believe that our founder, Vince Camuto, would be excited about the transaction and view the opportunity as a way to extend the company’s reach and realize his vision with an organization he always respected,” Del Cielo added.
“We are thrilled to partner with DSW Inc. on this strategic purchase that significantly grows ABG’s stake in the footwear and accessories market,” said Jamie Salter, chairman and chief executive officer of Authentic Brands Group. “Camuto Group’s world-class sourcing arm combined with DSW Inc.’s operational expertise and ABG’s proven know-how in brand building and marketing provide a strong foundation for long-term growth. Our partnership with DSW Inc. in particular is a game changer for ABG, as we are now linked to a footwear authority whose sourcing and manufacturing expertise will extend across our portfolio.”
DSW Inc’s Strategic Benefits
The acquisition of Camuto Group is expected to deliver several benefits to the organization:
- A healthy brand portfolio with attractive growth prospects in wholesale and direct-to-consumer that can leverage DSW’s expertise and infrastructure;
- Substantial growth in Camuto’s third-party licensing and international distribution business in partnership with ABG;
- New revenue opportunities from a larger addressable market;
- A strategic partnership with ABG that leverages their expertise in brand management and marketing across various brands and platforms;
- Immediate access to a talent base in design, sourcing, marketing and sales to support the growth of DSW’s exclusive brands over time.
Under the terms of the agreement, DSW Inc. 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 and state-of-the-art distribution center in New Jersey in addition to existing working capital of approximately $100 million. DSW Inc. 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. DSW Inc. will also acquire joint venture participation in the ED Ellen DeGeneres and Mercedes Castillo brands currently managed by the Camuto Group.
DSW Inc. will also contribute approximately $56M to acquire a 40 percent stake in the intellectual property of Camuto Group’s proprietary brands, with Authentic Brands Group taking the majority state of 60 percent. Brands include Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini and others. 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 Group will hold a majority stake in the joint venture and will be responsible for the development, growth and global marketing of the brands. Authentic Brands Group has released a separate announcement detailing the acquisition and partnership which can be viewed by visiting authenticbrandsgroup.com/news/.
DSW Inc. will fund its portion of the transaction through current cash and its existing credit facility. The transaction, which has been approved by the DSW Inc. Board of Directors, is subject to customary closing conditions and is expected to close at the beginning of the company’s fiscal fourth quarter. All Hart-Scott-Rodino Act waiting periods applicable to the transaction have expired and no further merger control clearances are required
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to DSW Inc., and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to DSW Inc. Paul Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Authentic Brands Group. MMG Advisors Inc. is serving as financial advisor to Camuto Group. Pryor Cashman LLP is serving as legal advisor to Camuto Group.