Levi Strauss to Sell Dockers Brand to Authentic Brands Group
As part of its bold strategic transformation, Levi Strauss & Co. LEVI has agreed to sell its Dockers brand to Authentic Brands Group for an initial transaction value of $311 million, with the potential to reach $391 million through an $80 million earnout based on future performance. This milestone deal is a major step in Levi's plan to sharpen its brand portfolio and accelerate growth in its core business segments.Founded in 1986, Dockers rose to prominence as the go-to brand for khakis and chinos, becoming a staple of casual office wear for decades. At its peak, the brand became virtually synonymous with business casual style. However, the broader casualization of workwear and a significant rise in remote work environments in recent years have contributed to a decline in sales, as traditional office attire saw reduced demand.Meanwhile, the sale of Dockers is part of Levi's strategy to align its business with key priorities, including a direct-to-consumer (DTC) first model, international expansion, and increased investment in women's apparel and the denim lifestyle segment. The CEO of Levi emphasized the importance of this strategic move, noting that Authentic is the right partner to lead Dockers into its next growth chapter. Management expressed appreciation for the Dockers team's contributions and affirmed that the transaction maximizes the brand's value.The transaction is expected to close in two phases: around July 31, 2025, for U.S. and Canadian operations, and around Jan. 31, 2026, for all remaining operations. Levi will also support the transition by providing services to Authentic and its partners for a limited period.In a separate announcement, Authentic Brands Group revealed that it has entered into a licensing agreement with Centric Brands, which will serve as Dockers' operating partner for select categories in the United States and Canada. This strategic partnership is expected to support the continued growth and expansion of the Dockers brand in key North American markets, ensuring a smooth transition and strong operational execution under Authentic's ownership.
With this agreement, Levi is strategically positioned to accelerate its transformation into a best-in-class omnichannel retailer. The company continues to evolve its globally iconic Levi's brand from a heritage jeans label into a comprehensive denim lifestyle brand while scaling the growth in its premium activewear offering, Beyond Yoga.
Levi remains focused on delivering long-term, sustainable and profitable growth across multiple categories, sales channels and global regions. In line with its disciplined capital allocation strategy, the company plans to return approximately $100 million of the net cash proceeds from the transaction to its shareholders through share repurchases, reinforcing its commitment to delivering value to stakeholders.
Levi is executing a focused long-term strategy centered on transforming into a leading global omnichannel retailer. At the heart of this plan is the continued evolution of the Levi's brand from a denim icon to a full lifestyle brand. By expanding its product assortment beyond traditional jeans to include tops, outerwear and other fashion-forward categories, Levi's aims to deepen consumer engagement and strengthen its presence across all key markets. This transformation is supported by significant investments in direct-to-consumer (DTC) channels, including e-commerce and owned retail stores, allowing the company to better control customer experiences, build loyalty and drive higher margins.
Shares of this Zacks Rank #3 (Hold) company have lost 19.3% in the past three months against the industry's growth of 9.5%.
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Some better-ranked stocks are Nordstrom Inc. JWN, Stitch Fix SFIX and Canada Goose GOOS.Nordstrom is a leading fashion specialty retailer. It has a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Nordstrom's fiscal 2025 earnings and revenues indicates growth of 1.8% and 2.2%, respectively, from the fiscal 2024 reported levels. JWN delivered a negative trailing four-quarter average earnings surprise of 26.1%.Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.The Zacks Consensus Estimate for SFIX's fiscal 2025 earnings implies growth of 46.9% from the year-ago actual. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank of 2 at present.The Zacks Consensus Estimate for Canada Goose's current fiscal year's earnings and revenues implies declines of 1.4% and 4.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 71.3%.
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