Background on Levi Strauss & Co. (LS&Co.)
Levi Strauss & Co., an iconic American denim manufacturer, has reached a definitive agreement to sell its Dockers brand to Authentic Brands Group (ABG) in a transaction valued at $311 million. This deal could potentially escalate to a total value of $391 million, including an additional $80 million contingent on Dockers’ performance over the next few years under ABG’s management.
Strategic Focus for Levi Strauss
This sale is part of Levi Strauss’s strategic plan to concentrate on its international growth, strengthen direct-to-consumer channels, and expand women’s and lifestyle denim segments. Michelle Gass, President and CEO of LS&Co., expressed confidence in maximizing the business value and selecting Authentic Brands Group as the right partner for Dockers’ future growth.
Authentic Brands Group’s Perspective
Jamie Salter, founder and CEO of Authentic Brands Group, sees Dockers as an opportunity to bolster a globally recognized brand. He highlighted Dockers’ established status and potential for licensing and expansion into new categories, aligning well with ABG’s business model.
Dockers Brand History
The Dockers brand was introduced in 1986 with the launch of a new casual khaki pants and workwear line. Over the years, it has become a well-known global brand.
Transaction Details
The asset transfer in the United States and Canada is scheduled for July 31, 2025, while international operations will conclude by January 31, 2026. Levi Strauss plans to allocate approximately $100 million from the net transaction income towards share repurchases, in line with its capital allocation strategy.
Advisors for the Transaction
BofA Securities served as financial advisors, and Cleary Gottlieb Steen & Hamilton LLP provided legal counsel for the deal.
Key Questions and Answers
- What is the main reason for Levi Strauss selling Dockers? Levi Strauss aims to focus on international growth, strengthen direct-to-consumer channels, and expand women’s and lifestyle denim segments.
- Who is Authentic Brands Group (ABG)? ABG is a conglomerate that seeks to acquire and manage global brands. Its CEO, Jamie Salter, sees Dockers as a brand with strong global recognition and potential for licensing and expansion.
- What is the total value of the Dockers sale? The initial deal is valued at $311 million, but it could potentially reach $391 million if Dockers meets certain performance targets over the next few years.
- When will the Dockers brand transfer be completed? The asset transfer in the United States and Canada is set for July 31, 2025, while international operations will conclude by January 31, 2026.
- How will Levi Strauss use the funds from this transaction? Levi Strauss plans to allocate around $100 million from the net transaction income towards share repurchases, aligning with its capital allocation strategy.
