Ca­muto Group to Be Ac­quired for $375M

WWD Digital Daily - - News - BY VICKI M. YOUNG

ABG agrees to buy

60 per­cent stake in com­pany's in­tel­lec­tual prop­erty, with DSW re­ceiv­ing the rest.

The Ca­muto Group has found a new home.

Au­then­tic Brands Group has inked a de­fin­i­tive agree­ment to pur­chase a 60 per­cent stake of the com­pany’s in­tel­lec­tual prop­erty, in­clud­ing the Vince Ca­muto, Louise et Cie, Sole So­ci­ety and Enzo An­gi­olini brands.

ABG is work­ing in part­ner­ship with DSW Inc., which will take a 40 per­cent stake in the IP and also buy Ca­muto’s sourc­ing and de­sign in­fra­struc­ture. The to­tal pur­chase price is $375 mil­lion and the two will part­ner to li­cense the brands across footwear, hand­bags and jew­elry.

Alex Del Cielo, chief ex­ec­u­tive of­fi­cer of Ca­muto Group, said: “The part­ner­ship with DSW and ABG cre­ates an un­matched op­por­tu­nity for the Ca­muto Group to ex­pand the plat­form for our lead­ing life­style brands.”

He added that in lev­er­ag­ing DSW’s re­sources: “[We] will strengthen our whole­sale busi­ness and bring to mar­ket an ex­cit­ing and world-class, di­rect-to­con­sumer ex­pe­ri­ence that will grow our brand eq­uity and cus­tomer de­mand across ad­di­tional points of sale. I be­lieve our founder Vince Ca­muto would be as ex­cited about the trans­ac­tion as we are and view the op­por­tu­nity as a way to ex­tend the com­pany’s reach and re­al­ize his vi­sion.”

Del Cielo will re­main ceo of Ca­muto Group, which will con­tinue to op­er­ate out of its of­fices in Con­necti­cut and New York.

Jamie Sal­ter, ABG’s chair­man and ceo, said: “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. In ad­di­tion, our part­ner­ship with DSW links ABG to a footwear au­thor­ity whose sourc­ing and man­u­fac­tur­ing ex­per­tise will ex­tend across our port­fo­lio.”

In a tele­phone in­ter­view, Sal­ter added, “This is one big deal that does a cou­ple of things that are in­cred­i­bly im­por­tant for ABG.”

He high­lighted the build­ing of a

“footwear plat­form, with a part­ner that has sourc­ing ca­pa­bil­i­ties.” ABG in July com­pleted its deal to buy the Nine West footwear and ac­ces­sories IP. The brand man­age­ment firm al­ready counts Frye and Taryn Rose as part of its footwear group. Ac­cord­ing to Sal­ter, ABG’s busi­ness is about 35 per­cent international, an area that he said Ca­muto Group is lack­ing and where ABG can help grow the busi­ness.

As for the part­ner­ship with DSW, Sal­ter said he’s worked with Jay Schot­ten­stein over the years. Schot­ten­stein, chair­man of DSW, re­tains a stake in Ju­dith Leiber, Taryn Rose and Adri­enne Vit­ta­dini, brands that have been un­der the ABG um­brella for the last seven years or so.

In the trans­ac­tion, DSW will ac­quire the Ca­muto Group oper­a­tion that in­cludes its de­sign, sourc­ing, pro­duc­tion and whole­sale in­fra­struc­ture. DSW will also have the li­cens­ing rights for Jes­sica Simp­son footwear, and the footwear and hand­bag rights for Lucky Brand and Max Stu­dio. DSW will also ac­quire joint ven­ture par­tic­i­pa­tion in the ED Ellen De­Generes and Mercedes Castillo brands. ABG will fo­cus on brand build­ing, mar­ket­ing and busi­ness de­vel­op­ment.

Roger Rawl­ins, ceo of DSW, told WWD the trans­ac­tion was a “game changer” for the in­dus­try. He said the deal is ex­pected to close on Nov. 5.

Ac­cord­ing to Rawl­ins, the mar­ket share in the footwear sec­tor has been go­ing to brands that have a di­rect-to-con­sumer busi­ness. In ac­quir­ing Ca­muto, the DSW ceo said the deal gives the com­pany a whole­sale busi­ness that, through the depart­ment store chan­nel, has ac­cess to “a con­sumer’s closet dif­fer­ent from the way we have to­day,” growth in the pri­vate la­bel busi­ness, a new part­ner­ship with ABG and an abil­ity to grow a di­rect-to con­sumer busi­ness. The ceo said the Ca­muto Group is un­der-pen­e­trated in the dig­i­tal chan­nel.

In a con­fer­ence call to Wall Street an­a­lysts Wed­nes­day, Rawl­ins said DSW’s con­tri­bu­tion to the pur­chase price is $256 mil­lion, with $56 mil­lion at­trib­uted to its 40 per­cent stake in the IP. The balance is for the op­er­a­tions com­po­nent of the busi­ness that also in­cludes the new state-of-the-art dis­tri­bu­tion cen­ter in New Jersey.

Jared A. Poff, DSW’s chief fi­nan­cial of­fi­cer and se­nior vice pres­i­dent, told an­a­lysts that the Ca­muto Group in 2017 had to­tal rev­enues close to $435 mil­lion, with about 75 per­cent at­trib­ut­able to its whole­sale footwear sales led by the Vince Ca­muto brand.

The Ca­muto Group was founded in 2001 as a footwear and ac­ces­sories firm, and is best known for its Vince Ca­muto brand. To­day, the brand can be found in sev­eral key cat­e­gories that in­clude footwear, fra­grance, ap­parel, hand­bags and ac­ces­sories across more than 8,000 re­tail lo­ca­tions in mul­ti­ple dis­tri­bu­tion chan­nels that in­clude depart­ment stores and spe­cialty doors. Fol­low­ing com­ple­tion of the trans­ac­tion, the Ca­muto fam­ily will no longer have any stake in the busi­ness. Founder Vince Ca­muto passed away in Jan­uary 2015.

Sep­a­rately, ABG will also ac­quire the

IP of the Bernard Chaus Inc. brands in part­ner­ship with Ariel Chaus, the cur­rent ceo and for­mer owner of BCI, which in­cludes 1.STATE, CeCe and Chaus. And

Ariel Chaus also will re­pur­chase the BCI busi­ness — the op­er­a­tions com­po­nent — from Ca­muto Group and be­come the core women’s ap­parel li­cens­ing part­ner for Vince Ca­muto. He will work closely with ABG on the de­vel­op­ment of a global foot­print for the women’s sports­wear plat­form.

Chaus said: “My re­pur­chase of BCI is fit­ting and a spe­cial tribute to the mem­ory of my late mom Josephine and my late date Bernard. Founded by my par­ents in 1976 and with a pro­found his­tory, BCI to­day stands at the thresh­old of a new era of op­por­tu­nity in which the need to trans­form and adapt to both re­tail part­ners’ and con­sumers’ de­sires and de­mands is en­dur­ing and com­pelling.”

Chaus said he will re­main ceo of BCI and con­tinue work­ing out of the com­pany’s ex­ist­ing head­quar­ters at 530 Sev­enth Av­enue, where the firm oc­cu­pies two floors. He will work with ABG to li­cense out the hand­bag and footwear cat­e­gories for the BCI brands. Chaus, who said he was one of the first to work with re­tail­ers on drop ship­ping, wants to con­tinue work­ing closely with his re­tail part­ners to be “more ver­ti­cal with them.” Ac­cord­ing to the BCI ceo, he has a speed-to-mar­ket ca­pa­bil­ity that now brings in goods from over­seas on a six-week time­frame.

The BCI brands, which mar­ket sources said bring in over $300 mil­lion in whole­sale rev­enues an­nu­ally, are sold in the bet­ter depart­ment store chan­nel, in­clud­ing Nord­strom, Bloom­ing­dale’s, Macy’s, Lord & Tay­lor and Dil­lard’s. Price points for wo­ven blouses range be­tween $79 to $89 at re­tail, $59 for cot­ton tops and $149 for blaz­ers, on aver­age.

Gold­man Sachs & Co. was the fi­nan­cial ad­viser to DSW, while MMG Ad­vi­sors was the fi­nan­cial ad­viser to Ca­muto Group.

A Vince Ca­muto ad im­age.

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