Levi Strauss Agrees to Sell Dockers Brand to Authentic Brands Group

Levi Strauss & Co. (NYSE:LEVI) has reached an agreement to sell its Dockers brand to Authentic Brands Group for $311 million, the companies announced on Tuesday.

Under the terms of the deal, Authentic Brands will acquire Dockers’ intellectual property, while Centric Brands will manage day-to-day operations, including manufacturing, sourcing, and distribution. Levi Strauss & Co. (NYSE:LEVI) could earn up to $391 million in the future depending on Dockers’ performance under Authentic’s ownership, which also oversees brands like Forever 21, Reebok, and Nautica.

The move follows Levi Strauss & Co. (NYSE:LEVI)’s October 2023 announcement that it was exploring options for Dockers, aiming to concentrate more on its core Levi’s brand and Beyond Yoga, its activewear line. Dockers, launched in 1986, became a go-to choice for office workers embracing the “Casual Friday” trend, especially during the 1990s.

However, in recent years, Dockers has struggled, particularly during the COVID-19 pandemic, as remote work shifted consumer preferences toward more casual and comfortable clothing. Even as some workers returned to the office, looser dress codes have persisted. Levi Strauss began evaluating strategic alternatives for the brand last fall, citing its lagging performance.

Dockers had been weighing on Levi Strauss & Co. (NYSE:LEVI)’s overall performance, prompting CEO Michelle Gass, who took over just over a year ago, to streamline operations by shedding non-core businesses and sharpening the company's focus on direct-to-consumer sales.

Despite declining U.S. demand, Dockers remains strong internationally, making it a good fit for brand managers like Authentic that excel at global licensing.

Authentic Brands Group plans to expand Dockers by using its extensive global network of licensing partners and is currently negotiating with regional operators across Latin America, Europe, the Middle East, and Asia to grow the brand internationally.

While we acknowledge the potential of LEVI to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than LEVI and that has 100x upside potential, check out our report about this cheapest AI stock.

READ MORE: 10 Biggest Dividend Cuts and Suspensions of 2024 and 10 Unstoppable Dividend Stocks to Buy Now

Disclosure. None.