American clothing company Levi Strauss has signed an asset purchase agreement with its distributor The Jeans Company (TJC) to acquire all operating assets related to Levi’s and Dockers brands for approximately $35m.
The Jeans Company is the distributor of Levi Strauss products in Chile, Peru and Bolivia.
The deal covers approximately 80 Levi’s and Dockers retail stores, distribution rights with the multi-brand retailers, as well as the logistical operations.
Levi Strauss Americas region president Roy Bagattini said: “Over the course of our 30-year partnership, TJC has enhanced the market position of the Levi’s and Dockers brands in Chile, Peru and Bolivia.
“We believe the acquisition of these assets will build on the strong foundation established by TJC and will position us to accelerate growth across the Andean region.”
The transaction is currently subject to various closing conditions and is expected to close by the end of the year.
In anticipation of the transition of operations, Levi Strauss has stopped shipping inventory to TJC with immediate effect.
The company expects that this move will have an impact of approximately $20m on its revenues in the second half of this year.
Levi’s and Dockers stores in the region will continue to operate as usual without interruption during the transition period.
Levi Strauss chief financial officer Harmit Singh said: “Deploying capital through organic acquisitions is a key part of our long-term strategy to become a world-class omnichannel retailer. This transaction will further diversify our business, create operational synergies and enhance shareholder value.”
Levi Strauss designs and markets jeans, casual wear and related accessories for men, women and children under the Levi’s , Dockers , Signature by Levi Strauss & Co., and Denizen brands.
The transaction is expected to close by the end of the year.
During this time, Levi’s and Dockers stores in the region are expected to remain open for business without interruption.