DSW’s decision last week to team with Authentic Brands Group (ABG), on the acquisition of the operations and intellectual property rights of the 17-year-old Camuto Group in a $375 million deal slated to close in Q4, is part of a broader strategy to expand its reach in footwear with both consumers and other retailers.

“Following the acquisition, our business model evolves from one that is 100 percent focused on North American retail to a model with new revenues from wholesale, licensing royalties and investment income,” DSW CEO Roger Rawlins told analysts last week. “Furthermore, it diversifies our business by increasing our exposure outside the moderate channel to improve department stores, regional chains, independent boutiques, pure play online and digital marketplaces.”

The complex transaction will bring DSW’s annual topline close to $3.5 billion after it pays $200 million for Camuto’s operations and $56 million for a 40-percent ownership in an IP joint venture with ABG. The deal also gives DSW the resources to manufacture high-quality men’s and women’s shoes in Asia. DSW will also acquire the licensing rights for Jessica Simpson footwear, the Lucky Brand and Max Studio footwear and handbags and joint venture (JV) participation in the Ellen DeGeneres and Mercedes Castillo brands.

From the transaction, DSW sees its four largest “buckets of growth” coming from other shoe retailers—Dillard’s, Nordstrom and Macy’s among them—in growing their respective footwear businesses; more private label product for DSW which currently generates only about 10 percent of revenues; licensing royalties through its relationship with ABG; and Direct-To-Consumer expansion.

Once the transaction closes, DSW is vowing to “go slow” out of the gate as its team learns the Camuto business, makes sure the Connecticut company’s wholesale partners are serviced properly and plots its longer-term strategy for the business. Camuto Group has been profitable over the last year, Rawlins said, but the footwear business has more recently been challenged by supply-chain constraints. DSW’s ownership will help Camuto return to “more normalized” operations over the next 12- to 18-months.

As for ABG, the global brand management company backed by investor Leonard Green, General Electric, David Simon and Chairman and CEO Jamie Salter, the New York company currently oversees 33 brands in the celebrity, lifestyle and sports categories. Among them: Nautica, Tapout, Spyder, Juicy Couture, Marilyn Monroe, Tretorn, Greg Norman and Elvis Presley. ABG brands generate 40 percent of revenues in international markets and over $8 billion in worldwide retail sales from approximately 50,000 points of distribution. The DSW-ABG JV includes the Vince Camuto, Luise et Cie, Sole Society and Enzo Angiolini brands among others and will focus on licensing the brands across existing lines in footwear, handbags and jewelry and new category development.