Levi Strauss to Sell Docker Brand
Levi Strauss (NYSE:LEVI) shares gained to start Tuesday, on announcing it has agreed to sell Dockers to brand management firm Authentic Brands Group for $311 million.
Under the terms of the deal, Authentic will own Dockers’ intellectual property while Centric Brands will take on operations, handling manufacturing, sourcing and distribution. Under the brand management business model, Levi’s stands to make up to $391 million in future years based on how well Dockers performs under the Authentic umbrella, which also includes Forever 21′s intellectual property and brands like Reebok and Nautica.
Said Levi’s CEO Michelle Gass, “The Dockers transaction further aligns our portfolio with our strategic priorities, focusing on our direct-to-consumer first approach, growing our international presence and investing in opportunities across women’s and denim lifestyle.
“After a robust process, we are confident that we maximized the value of the business and that Authentic is the right organization to usher in the next chapter of growth for the Dockers brand.”
Levi’s created Dockers in 1986 as a hedge against denim and to offer consumers an alternative: khakis. The brand was hugely popular throughout the 1990s and 2000s, but khakis have since fallen out of fashion in the U.S., especially recently as denim makes another comeback.
LEVI shares captured 39 cents, or 2.2%, to begin Tuesday at $17.97.
