What led Camuto Group, the 17-year-old footwear design and production house, to divest itself in early November for $375 million to a consortium led by DSW and Authentic Brands Group?

The answer is three-fold, according to DSW CFO Jared Poff. A failed entry into retail, a strategic error with a new distribution center and missed deliveries to key retail partners all contributed to significant operating losses for Camuto in 2017.

Impacted by the bankruptcies of Nine West and The Rockport Group, Camuto also saw its factory partners begin to shrink their respective capacities for the firm’s products, lower ship orders and increase their prices to cover Camuto’s higher credit risk. As a result, the company was forced to spend more on air freight product in from China but continued experiencing a higher late delivery rate with customers that prompted higher discounting at retail.

DSW says its Camuto acquisition, $200 million for operations and $56 million for a 40-percent stake in the IP with ABG, helped the company pay up factories and restore their normal capacity and service levels with them. Additionally, the acquirer thinks its expertise in distribution can bring engineering and operating guidance to Camuto that will assist the company in better leveraging its new distribution center over the next few months. But, given the typical nine-month lead time for footwear, DSW won’t likely see the full financial benefit of its Camuto acquisition until late 2019. It is pledging to help the company construct a Direct-To-Consumer business for its stable of brands, including Jessica Simpson, Lucky Brand and Max Studio.

Starting in 2020, DSW is projecting double-digit EPS accretion from the Camuto Group purchase as it moves the sourcing of its own brands into the company’s infrastructure. More immediately, Camuto’s Spring 2019 orders are said to be on track to improve year-over-year.