COLUMBUS, Ohio, Nov. 6, 2018 /PRNewswire/ -- DSW Inc.
(NYSE: DSW), a leading North American footwear and accessories
retailer, today announced it has completed its previously announced
acquisition of the operations of Camuto Group, the legendary
product design and brand development organization best known for
the successful Vince Camuto® brand and the footwear licenses of
Jessica Simpson® and Lucky Brand®. As part of the transaction, DSW
will acquire Camuto Group's entire global production, sourcing and
design infrastructure, including operations in Brazil and China, a new, state-of-the-art distribution
center in New Jersey and a large
amount of working capital consisting primarily of fresh branded
inventory and accounts receivable.
Additionally, DSW Inc. and Authentic Brands Group LLC (ABG), a
global brand development, marketing and entertainment company,
announced they 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% 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 Inc. 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% stake in
the intellectual property of Camuto Group's proprietary brands with
Authentic Brands Group taking the majority stake of 60%
- $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
stabilizes and grows. DSW's support enables Camuto Group to grow
the business of its critical wholesale partners.
The transaction is expected to deliver several key strategic and
financial benefits.
Key Strategic Benefits:
- Immediate access to a talent base in design, sourcing,
marketing and sales which is essential to growing DSW's exclusive
brand business;
- Portfolio of globally recognized fashion brands with extensive
millennial following, deepening DSW's connection with that
demographic;
- A robust wholesale business, which greatly expands DSW's
addressable market and consumer touchpoints;
- A strategic partnership with ABG that leverages their expertise
in brand management and marketing across various brands and
platforms and future opportunities to collaborate with ABG on their
extensive portfolio of owned brands;
Key Financial Benefits:
- Immediate access to a world-class design and sourcing
organization, allowing DSW to avoid the substantial upfront capital
investment, operating expenses, time investment and learning curve
costs of developing similar capabilities associated with building
such an organization itself;
- Meaningful day-one gross margin uplift from capturing the
wholesale margin on existing Camuto products sold at DSW;
- Significant gross margin recapture as DSW begins to transition
its exclusive brands portfolio to the Camuto platform by fiscal
2020; this infrastructure ultimately enables DSW to grow its
exclusive brands business to $1
billion in annual retail sales, which traditionally
generates 700 bps to 1,000 bps higher gross margin rates;
- Opportunity to substantially grow Camuto Group's
direct-to-consumer business leveraging DSW's proven expertise and
infrastructure;
- Opportunity to improve Camuto Group's profitability with DSW's
extensive operating resources and global logistics and supply chain
expertise;
- Equity income through the joint venture, which will be
responsible for growing licensing revenue from Camuto brands across
several category extensions and across new global territories;
- Double-digit pro forma cash EPS accretion expected by end of
fiscal 2020.
The standalone Camuto Group business model becomes accretive
by:
- Freeing up liquidity which had been strained after funding an
unsuccessful attempt to operate retail stores and a challenged
launch of a new distribution center, both of which resulted in
substantial cash outlays, significant increased costs and business
disruption. This transaction eliminates the Camuto debt
burden and returns them to a state of fully flexible
liquidity;
- Bringing the Camuto distribution center to meaningfully
improved efficiency levels with the guidance of DSW's own
engineering experts and experience in this space. DSW expects
limited capital investment in the DC going forward.
"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 Inc.," 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."
About DSW Inc.
DSW Inc. is a leading footwear and accessories retailer that
operates a portfolio of several value retail concepts under the DSW
Designer Shoe Warehouse, Shoe Company, Shoe Warehouse and Town
Shoes brands. DSW also supplies footwear at leased locations in the
U.S. through its Affiliated Business Group and franchised
international locations. Products are available
across North America at nearly 1,000 retail outlets and
via e-commerce sites and a mobile app. More information can be
found at www.dswinc.com.
About Camuto Group
Camuto Group is an international company that designs, develops
and distributes fashion footwear, accessories and apparel. Founded
in 2001 by Vince Camuto, the company
is renowned for its ability to develop lifestyle brands on a global
scale. Camuto Group builds on the success of Vince Camuto®,
extending to brands that include Louise et Cie®, Two By
Vince Camuto®, Vince Camuto® men's,
Imagine Vince Camuto® and 1. STATE®. Camuto Group also holds
footwear licenses for Jessica Simpson®, as well as footwear and
handbag licenses for Lucky Brand® and ED Ellen DeGeneres®. To
expand Camuto Group's platform and develop apparel opportunities
for partners, the company acquired Bernard Chaus Inc. in 2015. As
part of the company's focus on digital innovation and demand
prediction, Camuto Group added Sole Society® to its stable of
brands in 2016. In addition, Camuto Group entered into a
partnership with Mercedes Castillo® to launch an advanced
contemporary lifestyle collection. Camuto Group products are sold
in more than 5,400 doors worldwide.
About Authentic Brands Group
Authentic Brands Group (ABG) is a brand development, marketing
and entertainment company, which owns a portfolio of global
entertainment and lifestyle brands. Headquartered in New York City, ABG manages, elevates and
builds the long-term value of more than 50* consumer brands and
properties by partnering with best-in-class manufacturers,
wholesalers and retailers. Our brands have a global retail
footprint in more than 50,000 points of sale across the luxury,
specialty, department store, mid-tier, mass and e-commerce channels
and more than 4,550* branded freestanding stores and shop-in-shops
around the world. ABG is committed to transforming brands by
delivering compelling product, content, business and immersive
brand experiences. We create and activate original marketing
strategies to drive the success of our brands across all consumer
touchpoints, platforms and emerging media. ABG's portfolio of
iconic and world-renowned brands generates $8.7 billion* in annual retail sales worldwide
and includes Marilyn Monroe®, Mini Marilyn®, Elvis Presley®,
Muhammad Ali®, Shaquille O'Neal®, Dr. J®, Greg Norman®, Neil Lane®,
Thalia®, Michael Jackson® (managed brand), Nautica®, Aéropostale®,
Juicy Couture®, Vince Camuto®, Herve Leger®, Judith Leiber®,
Frederick's of Hollywood®, Nine West®, Frye®, Jones New York®,
Louise et Cie®, Sole Society®, Enzo Angiolini®, CC Corso Como®,
Hickey Freeman®, Hart Schaffner Marx®, Adrienne Vittadini®, Taryn
Rose®, Bandolino®, Misook®, 1.STATE®, CeCe®, Chaus®, Spyder®,
Tretorn®, Tapout®, Prince®, Airwalk®, Vision Street Wear®, Above
The Rim®, Hind®, Thomasville®*, Broyhill®*, Drexel®* and
Henredon®*. For more information, please visit ABG-NYC.com.
*Pending the closing of the Heritage Home Group brands
acquisition in Q4 of 2018.
Cautionary Statement Concerning Forward-Looking Statements
This release contains forward-looking statements addressing the
acquisition and the other transactions contemplated in the
definitive agreement and other statements about future
expectations, prospects, estimates and other matters that are
dependent upon future events or developments. These statements may
be identified by words such as "expect," "anticipate," "intend,"
"plan," "believe," "will," "should," "could," "would," "project,"
"continue," "likely," and similar expressions. These matters are
subject to risks and uncertainties that could cause actual results
to differ materially from those projected, anticipated or implied.
These risks and uncertainties include the ability to successfully
complete the acquisition on a timely basis; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the definitive agreement; the outcome of any legal
proceedings that may be instituted against the parties and others
related to the acquisition; or the satisfaction of certain
conditions to the completion of the acquisition. This release
reflects management's views as of November
6, 2018. Except to the extent required by applicable law,
DSW Inc. undertakes no obligation to update or revise any
forward-looking statement.
View original
content:http://www.prnewswire.com/news-releases/dsw-inc-and-authentic-brands-group-complete-acquisition-of-legendary-footwear-and-accessories-organization-camuto-group-300744499.html
SOURCE DSW Inc.