US apparel company Levi Strauss & Co has agreed to divest its Dockers brand to Authentic Brands Group for a base sum of $311m.
The deal value is subject to standard adjustments and the fulfilment of closing conditions, with the possibility of increase to as much as $391m if certain future performance milestones are met, resulting in an additional earnout of $80m.
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For the fourth quarter (Q4) of the fiscal year 2024 (FY24), Dockers reported net revenues of $89.8m, reflecting a 9.4% increase on a reported basis and a 5% rise organically.
However, across the entire year, Dockers experienced a 4% reduction in net revenues, amounting to $323.3m.
The brand was reclassified as discontinued operations in Q1 FY25.
Levi Strauss & Co president and CEO Michelle Gass stated: “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.
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By GlobalData“After a robust process, we are confident that we maximised the value of the business and that Authentic is the right organisation to usher in the next chapter of growth for the Dockers brand.”
The divestiture positions Levi Strauss to optimise its capabilities as an exceptional omnichannel retailer while enhancing the Levi’s brand to a comprehensive denim lifestyle offering and expanding the Beyond Yoga brand.
Levi Strauss aims to deliver profitable growth across various categories, sales channels and geographical markets while maintaining its commitment to delivering value to stakeholders.
The company plans to redistribute $100m from the net cash proceeds of this sale back to its shareholders via share repurchases, consistent with its capital allocation policy.
The deal is subject to customary closing conditions and is anticipated to close around 31 July 2025 for Dockers’ intellectual property and operations within the US and Canada.
The remaining operations are expected to transfer by 31 January 2026.
Levi Strauss will provide certain transitional services to Authentic and its partners for a defined period post-transaction.
