Fifth & Pacific Cos. (NYSE:FNP) said it has sold its Lucky Brand Jeans division to private-equity firm Leonard Green & Partners LP for $225 million, part of a plan to unload assets so the company can focus more heavily on its Kate Spade brand.
The terms work out to Leonard & Green paying $140 million in cash to Fifth & Pacific, and the other $85 million will come from a three-year seller note. Lucky Brand Jeans would assume its sourcing contracts and other obligations related to its business. The sale is expected to be finalized in early 2014.
"It is truly a historic day at Fifth & Pacific Companies--a return to our roots as a mono-brand company," said William L. McComb, CEO of Fifth & Pacific Cos. "The decision to sell Lucky Brand Jeans is the result of a process we began last year. It is the outcome of our work to identify the best way to unlock shareholder value. We believe that by focusing all of our resources on the huge opportunity at Kate Spade, we can deliver the strongest value creation opportunity for our shareholders. This is all about bringing Kate Spade to its full potential," McComb added.
Last month, Fifth & Pacific also sold its once popoular Juicy Coture label for $195 million to Authentic Brands. Net proceeds from the Lucky Brand Jeans deal, as well as the divestiture the struggling Juicy Couture brand, are expected to reach $370-380 million.
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