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(Bloomberg) — Levi Strauss & Co. has entered a pact to sell khaki maker Dockers to Authentic Brands Group for an initial transaction value of $311 million, as the denim retailer seeks to bolster its namesake brand and premium products.
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The deal has the potential to reach up to $391 million through an $80 million earnout opportunity in future years based on Dockers’ business under Authentic’s ownership, according to a statement from Levi.
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Levi said it intends to return about $100 million of the net cash proceeds from the transaction to shareholders through share repurchases, in line with its established capital allocation strategy.
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The agreement remains subject to customary closing conditions and is expected to be completed in the third quarter of 2025, according to a separate statement from Authentic.
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Authentic said it had signed a licensing agreement with its partner Centric Brands, which will serve as the operating partner for Dockers across key categories in the US and Canada. Authentic is also actively discussing transitioning Dockers’ business in international markets including Latin America; Europe, Middle East, and Africa; and Southeast Asia.
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The deal comes after San Francisco-based Levi in April maintained a full-year outlook that excluded the impact from sweeping US tariffs that are set to raise the price of clothing across the industry.
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Levi faces a more limited impact from tariffs compared with other apparel brands, analysts have said, owing to its relatively low China exposure and volume of non-US sales. About 40% of the company’s revenue comes from America.
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The Dockers deal aligns with Levi’s strategy of focusing on direct-to-consumer sales, growing internationally and investing further in the women’s and denim segments, Chief Executive Officer Michelle Gass said in Tuesday’s statement.
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“After a robust process, we are confident that we maximized the value of the business,” Gass said.
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Two decades ago, Levi sought and failed to sell the Dockers brand, which had $1 billion in sales at the time, saying it didn’t receive “appropriate” offers.
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