Levi’s, the iconic denim brand, has made a big move by agreeing to sell Dockers to Authentic Brands Group for a whopping $311 million. This deal means that Authentic will have ownership of Dockers’ intellectual property, while Centric Brands will handle the day-to-day operations. Levi’s is set to potentially earn up to $391 million in the future based on how well Dockers performs under Authentic’s umbrella, which also includes other popular brands like Reebok and Nautica.
Why did Levi’s decide to sell Dockers in the first place? Well, it all comes down to strategic priorities. Levi’s CEO Michelle Gass explained that the sale aligns with their focus on direct-to-consumer sales, expanding internationally, and investing in women’s and denim lifestyle opportunities. Dockers, a brand created by Levi’s in 1986 to offer an alternative to denim with khakis, was once a hit in the 90s and 2000s. But as trends shifted and denim made a comeback, khakis fell out of fashion in the U.S., leading Levi’s to reevaluate its portfolio.
The performance of Dockers was dragging down Levi’s overall results, and Gass, who took the reins just over a year ago, has been working to streamline the business and prioritize direct selling. By cutting off extraneous brands like Dockers, Levi’s aims to fuel growth and focus on what truly matters. In the past quarter, Dockers brought in $67 million in revenue for Levi’s, but with the brand struggling to keep up with changing consumer preferences, it was time for a change. Authentic Brands Group saw potential in Dockers, especially in international markets where the brand still holds appeal. This strategic fit led to the acquisition and plans for global expansion.
