Levi Strauss has reached an agreement to sell its Dockers brand to Authentic Brands Group, a firm specializing in brand management, for $311 million, as announced on Tuesday.
As a result of the transaction, Authentic Brands will acquire the intellectual property associated with Dockers, while Centric Brands will manage its operations, encompassing manufacturing, sourcing, and distribution. Levi’s may benefit from the deal, potentially earning up to $391 million in future earnings, depending on Dockers’ performance under Authentic’s management, which also oversees other notable brands like Forever 21, Reebok, and Nautica.
“This transaction with Dockers further aligns our portfolio with our strategic priorities, emphasizing our direct-to-consumer approach, expanding our international footprint, and investing in growth opportunities across women’s and denim lifestyle categories,” Levi’s CEO Michelle Gass stated. “After a thorough evaluation process, we believe we have maximized the business’s value, and that Authentic is well-positioned to lead Dockers into its next growth phase.”
In October, Levi’s signaled its intention to sell Dockers as it sought to concentrate on bolstering its core brand and its athleisure line, Beyond Yoga. First introduced in 1986 as an alternative to denim, Dockers gained immense popularity in the 1990s and 2000s; however, the preference for khakis has since declined in the U.S., particularly as denim made a resurgence.
For Dockers to rejuvenate its presence, Levi’s would require a broader range of products, but the company is simultaneously pursuing similar strategies with its primary label, leading to considerable overlap. Additionally, Dockers’ lagging performance was negatively impacting Levi’s overall results, prompting Gass, who stepped into her role just over a year ago, to streamline operations by divesting underperforming segments to focus on direct sales growth.
In the quarter ending March 2, Levi’s reported $67 million in revenue attributed to Dockers. This figure is not directly comparable to the previous year, as the company has only recently begun disaggregating revenue by individual brands.
Despite the decline in khaki popularity domestically, Dockers remains well-regarded in international markets, making it an appealing target for a brand management company like Authentic, according to sources familiar with Dockers’ financial situation who requested anonymity. Such firms excel at licensing and expanding brand reach on a global scale.
In its announcement, Authentic expressed its intent to “unlock new opportunities” for Dockers through its extensive network of 1,700 licensing partners. The company indicated it is already in discussions with regional operators across Latin America, Europe, the Middle East, and Asia to broaden Dockers’ presence in these areas.
“Few brands dominate a category quite like Dockers, yet there remains significant growth potential,” remarked Matt Maddox, president of Authentic. “Its established reputation in casual wear provides a robust foundation, but the true potential lies in reinventing the brand for newer generations. With our global platform and comprehensive licensing network, we are dedicated to guiding Dockers into its next phase of growth and relevance.”
