Key Takeaways:
- Levi Strauss & Co. has entered into a definitive agreement to sell its Dockers® brand to Authentic Brands Group for $311 million, according to the official company press release.
- The deal includes potential for up to $391 million in total value, with an $80 million earnout opportunity based on future performance.
- This move aligns with Levi’s strategic focus on its direct-to-consumer approach, international growth, and expanding its women’s and denim lifestyle offerings.
- Levi’s plans to return approximately $100 million of the net proceeds to shareholders through share repurchases.
Iconic denim manufacturer Levi Strauss & Co. (NYSE: LEVI) announced Tuesday that it has entered into a definitive agreement to sell its Dockers® brand to Authentic Brands Group (ABG) for $311 million, subject to customary adjustments and closing conditions, according to the company’s official press release.
The Deal Structure
According to the official press release, the $311 million transaction is “subject to customary adjustments and closing conditions” and includes “the potential to reach up to $391 million through an $80 million earnout opportunity in future years based on the performance of the Dockers® business under Authentic’s ownership.”
The transaction is structured to close in phases, with the first closing for Dockers® intellectual property and operations in the United States and Canada expected “on or around July 31, 2025,” and the remaining Dockers® operations closing “on or around January 31, 2026.” Levi Strauss will provide certain transition services to Authentic and its partners through a limited transition period.
Strategic Rationale Behind the Sale
Levi’s CEO Michelle Gass explained the strategic reasoning behind the divestiture in the official announcement: “The Dockers® transaction further aligns our portfolio with our strategic priorities, focusing on our direct-to-consumer (DTC) first approach, growing our international presence and investing in opportunities across women’s and denim lifestyle.”
She added, “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. We thank the global Dockers® team for their strong commitment and execution to building the brand, which continues to be the authority on khaki.”
The press release states that with this agreement, “LS&Co. is well positioned to reach its potential as a best-in-class omnichannel retailer as it continues to evolve the globally iconic Levi’s® brand from jeans to denim lifestyle while also scaling the Beyond Yoga® brand.”
Financial Impact and Shareholder Returns
An important aspect of this transaction for investors is Levi’s plan for the proceeds. According to the press release, “LS&Co. intends to return approximately $100 million of the net cash proceeds from the transaction to shareholders through share repurchases, in line with its established capital allocation strategy.”
The company states it “remains focused on driving long-term, sustainable profitable growth across categories, channels and regions as it continues to deliver stakeholder value.”
For context, Levi Strauss & Co. reported net revenues of $6.4 billion for fiscal year 2024, according to company information included in the release.
Why Authentic Brands Group Makes Sense as the Buyer
Jamie Salter, Founder, Chairman and CEO of Authentic, commented on the acquisition: “Dockers® is a natural fit for the Authentic model. It’s a brand with deep roots, high awareness and a solid foundation in licensing — all things we look for when acquiring new brands. Dockers® played a key role in shaping casual workwear as we know it today, and we see significant potential to build on that legacy and grow the brand across a variety of categories.”
This statement aligns with Authentic Brands Group’s business model of acquiring established brands with strong recognition and global potential.
Looking Ahead: Transaction Timeline and Advisors
The transaction remains subject to customary closing conditions and follows a phased approach:
- First closing (for Dockers® intellectual property and operations in the United States and Canada): Expected on or around July 31, 2025
- Second closing (for remaining Dockers® operations): Expected on or around January 31, 2026
According to the press release, BofA Securities, Inc. is serving as financial advisor to LS&Co., and Cleary Gottlieb Steen & Hamilton LLP is serving as its legal advisor.
The Bottom Line
This transaction represents a strategic realignment for both companies, based on their public statements. For Levi Strauss & Co., the divestiture aligns with its focus on becoming “a best-in-class omnichannel retailer” while evolving “the globally iconic Levi’s® brand from jeans to denim lifestyle” and scaling its Beyond Yoga® brand.
For Authentic Brands Group, the acquisition adds a category-defining brand with “deep roots, high awareness and a solid foundation in licensing” to its portfolio, with stated intentions to “build on that legacy and grow the brand across a variety of categories.”
The transaction reflects ongoing evolution in the retail apparel sector, with established companies refocusing on core strengths while specialized brand management firms expand their portfolios of recognizable consumer brands.
