The brand management firms are lining up to buy Dockers from Levi Strauss & Co. in what is shaping up to be a competitive process.
According to sources, the big players in the brand management space — Authentic Brands Group, Marquee Brands and WHP Global as well as Bluestar Alliance, which nearly purchased the brand the last time it was being shopped — are all seen as potentially being interested in the business. Some players are said to have already begun discussions with Levi’s and Bank of America, which has been retained to formally review strategic options for Dockers.
Executives at Authentic and Marquee had no comment about their interest, Bluestar did not respond, and WHP Global could not be reached for comment because of the Jewish holiday on Friday.
Dockers has long been treated as a stepchild by Levi’s, which created the business as a men’s khaki brand in 1986 to diversify beyond its denim roots. While it was at the vanguard of the Casual Friday movement, once that cycle ran its course — and other companies got into the space — the brand struggled.
Levi’s has entertained the idea of selling the brand several times. In 2004, it signed a letter of intent to sell Dockers to Vestar Capital Partners, but that deal never closed. More recently, in the spring of 2021, it was flirting with a deal to sell it to Bluestar, sources said at the time, but that never came to fruition either.
This time, it appears Levi’s new chief executive officer, Michelle Gass, who assumed that position in January, is serious about a sale. When reporting its third-quarter sales on Wednesday, the company said it will be focusing more of its energies on the core Levi’s brand, which is looking to grow its business and recently tapped Beyoncé to help bolster its women’s segment. Levi’s is also optimistic about the smaller, but quickly growing Beyond Yoga athleisure brand, which helps the company diversify away from denim in a more-modern way.
Dockers, which is primarily a men’s brand, doesn’t fit into the new chief’s plan. Neither did the company’s European footwear business, which was exited earlier this year, or its value-oriented Denizen brand, which is also being closed down.
The Dockers logo.
Courtesy of Levi’s
Chief financial and growth officer Harmit Singh told WWD on Wednesday: “Sometimes focus is important. And with Michelle coming in [as CEO], we have really focused on amplifying. We talked about women’s and Beyond Yoga and this year we announced the exit of our footwear business. We announced that we were getting out of Denizen and now the big one with Dockers, and this is really about amplifying the focus on Levi’s.
“Strategically, our view is that the exit of Dockers will improve the margin structure of the company and top-line growth,” he said.
In the third quarter, Dockers sales dropped 15.1 percent to $73.7 million from $86.7 million the prior year. For the nine months, sales were down 8.4 percent to $233.5 million from $252.7 million.
Even so, the brand management companies believe there is much untapped potential in Dockers. As one executive said: “It’s well known with broad distribution and has had at least modest international success. No doubt it will be a competitive process.”
Over the years, Dockers has had a number of CEOs and today it is being led by Natalie MacLennan who assumed the top post in May 2023 following the departure of Santiago Cucci, a 10-year veteran of Levi’s who become CEO of Dockers in the fall of 2022. His plan was to separate Dockers from Levi’s oversight and create a dedicated team to operate the business. His tenure at the top lasted six months.
But his explanation for separating the brands at the time summed up the internal situation well. “When you are in charge of two brands and one brand is so big and aspirational, your energy goes there first. So we were managing Dockers, which was [fine] when the business was OK, but when the business starts to be a bit more complex, it looks like you are giving up and that’s why Dockers was declining in the Levi Strauss organization for the last 12 years — nobody was really accountable.”
MacLennan’s goals for Dockers have included growing the women’s business, which accounts for a small percentage of overall sales and was recently revamped. While the women’s market in the U.S. has been a tough nut to crack for Dockers, the brand performs well internationally, MacLennan said in a late 2023 interview. At that time, half of Dockers’ overall revenue came from overseas accounts.
MacLennan had also planned to add to its store fleet, most of which are located outside U.S. borders. According to its website, there are five outlet stores in the U.S., and the brand is also carried at Macy’s, Kohl’s and JCPenney.
Levi’s said there is no set deadline to sell the brand.
