Authentic Brands Group has flexed its considerable muscle — and its sizable bank account — to score another high-profile acquisition: Dockers.
In March, Authentic competitor Marquee Brands was on the verge of finalizing a deal to buy the men’s khakis brand from Levi Strauss & Co., but the volatile economic situation around tariffs forced Marquee to walk away, opening the door for Authentic.
Under the terms of the deal, which was announced before the markets opened Tuesday, Levi’s has signed a definitive agreement to sell Dockers to Authentic for $311 million. The deal has the potential to ultimately reach up to $391 million through an $80 million earn-out opportunity based on the performance of the Dockers business under Authentic’s ownership in the years ahead.
“The Dockers transaction further aligns our portfolio with our strategic priorities, focusing on our direct-to-consumer first approach, growing our international presence and investing in opportunities across women’s and denim lifestyle,” said Michelle Gass, president and chief executive officer of Levi’s. “After a robust process, we are confident that we maximized the value of the business and that Authentic is the right organization to usher in the next chapter of growth for the Dockers brand. We thank the global Dockers team for their strong commitment and execution to building the brand, which continues to be the authority on khaki.”
Justin Chung for Dockers.
Courtesy
Levi’s said it intends to return approximately $100 million of the net cash proceeds from the transaction to shareholders through share repurchases.
“Dockers is a natural fit for the Authentic model,” said Jamie Salter, founder, chairman and CEO of Authentic. “It’s a brand with deep roots, high awareness and a solid foundation in licensing — all things we look for when acquiring new brands. Dockers played a key role in shaping casual workwear as we know it today, and we see significant potential to build on that legacy and grow the brand across a variety of categories.”
The deal will happen in two parts, with the sale of Dockers’ intellectual property and operations in the U.S. and Canada expected to close around July 31, while the sale of the rest of the brand’s operations will be wrapped up around Jan. 31.
In addition, Levi’s will provide certain transition services to Authentic and its licensing partners through a limited transition period.
Authentic wasted no time rolling up its sleeves and getting to work. Although the deal won’t close until the third quarter, it has already signed a licensing agreement with its long-standing partner Centric Brands, which will serve as the operating partner for Dockers across key categories in the U.S. and Canada. Centric will take on oversight of the sportswear, activewear, kids’ apparel, dress shirts, workwear and performance golf categories, Authentic said.
Jason Rabin, CEO of Centric Brands, said, “Dockers represents everything we look for in a brand partnership — iconic heritage, consumer loyalty and growth potential. We’re bringing the same strategic expertise to Dockers that we’ve applied to our successful brand portfolio that includes design, strategic sourcing and an extensive wholesale network. We look forward to the growth of the Dockers brand.”
The plan, Authentic said, is to tap its global network of more than 1,700 licensing partners to expand Dockers’ reach. Authentic said it is already in “active discussions with regional operators” to build on the business across Latin America, Europe, the Middle East and Southeast Asia.
“Few brands own a category the way Dockers does, yet still have so much room to grow,” said Matt Maddox, Authentic’s president. “Its legacy in casualwear gives it a strong foundation, but the real opportunity lies in reimagining the brand for a new generation. Through our global platform and deep licensing network, we’re committed to stewarding the brand into its next era of growth and relevance.”
The fate of Dockers president Natalie MacLennan and the rest of the current management team is unknown. A spokesperson for Authentic said it is premature to discuss since the deal will not close until July.
The sale of Dockers is illustrative of Levi’s plans to focus more on its namesake brand and its women’s business, which includes Beyond Yoga, which it is in the process of expanding.
Bank of America helped Levi’s pursue “strategic alternatives” for the men’s-focused Dockers business.
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 center 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.
Dockers had sales last year of around $318 million, which accounted for roughly 5 percent of Levi’s overall revenues. But its well-known brand name and global reach — it currently sells in 50 countries — make it a prime candidate for growth under Authentic.
Authentic owns more than 50 brands that collectively generate approximately $32 billion in annual systemwide retail sales. It operates in 150 countries, has more than 29,000 freestanding stores and shops-in-shop, as well as 400,000 points of sale worldwide. Among its brands are Reebok, Champion, David Beckham, Nautica, Brooks Brothers and Sports Illustrated. Through its joint venture with Saks Global, Authentic Luxury Group, it works with Barneys New York, Judith Leiber, Hervé Léger, Vince, Neiman Marcus, Saks Fifth Avenue and Saks Off 5th.
