The Levi's brand logo on a store.
Jens Kalaene | Photo alliance | Getty images
Levi Strauss agreed to sell dockers to the Authentic Brands Group brand management company for $ 311 million, companies announced on Tuesday.
Under the terms of the agreement, Authentic will own the intellectual property of the dockers while the centered brands will take operations, the management of manufacturing, supply and distribution. As part of the brand management model of the brand, Levi's should gain up to $ 391 million in the coming years according to the performance of dockers under the authentic umbrella, which also includes the intellectual property of Forever 21 and brands like Reebok and Nautica.
“The Dockers transaction aligns our portfolio with our strategic priorities, focusing on our first direct approach to consumers, increasing our international presence and investing in opportunities in the lifestyle of women and denim,” said Levi CEO Michelle Gass. “After a robust process, we are convinced that we have maximized the value of the company and that authentic is the right organization to inaugurate the next growth chapter for the Dockers brand.”
In October, Levi announced that he was planning to sell dockers while he was trying to focus on the growth of his homonymous line and his athleist brand, beyond yoga. Levi's created Dockers in 1986 as coverage against denim and to offer consumers an alternative: Kakis. The brand was extremely popular in the 1990s and 2000s, but khakis have since fallen out of fashion in the United States, all the more recently because Denim made another return.
To develop dockers, Levi needs to offer more ups and downs, but the company does the same thing in its homonymous banner and there has been too much overlap between the two brands. Dockers' performances have also led to Levi and Gass's results, who took the lead in the company a little over a year ago, worked to cut foreign companies to fuel growth and focus on direct sale.
During the three months closed on March 2, Levi's said $ 67 million in Dockers. The figure is not comparable to the period of the previous year, because Levi has recently started to break the performance of each individual brand.
While the khakis fell in disgrace in the United States, Dockers is still popular abroad, This is what makes a brand management company a strategic adjustment, according to people who saw the finances of the dockers and spoke of the state of anonymity because the details were private. Companies like Authentic are qualified to luce and quickly deploy brands internationally.
In a press release, Authentic said it planned to “unlock new opportunities” for dockers via its global network of 1,700 license partners. He said he was active discussion with regional operators in Latin America, Europe, the Middle East and Asia to extend existing dockers on these markets.
“Few brands have a category as the Dockers do, but still have so much room to grow,” said Matt Maddox, president of Authentic. “Its heritage in occasional clothes gives it a solid basis, but the real opportunity lies in the brand's reinvention for a new generation. Thanks to our global platform and our deep license network, we are committed to managing the brand in its next era of growth and relevance.”