Fifth & Pacific on Tuesday announced the sale of Lucky Brand Jeans as it looks to focus its resources on what it describes as “the huge opportunity at Kate Spade”.
Private equity firm Leonard Green & Partners LP will spend USD 225 million to acquire Lucky Brand Jeans, USD 140 million of which will be paid in cash, and the remaining in the form of a three-year seller note.
It’s well known that Fifth & Pacific is keen to turn its attention to Kate Spade, after announcing the sale of its Juicy Couture brand to Authentic Brands Group in November.
Speaking back in November, Fifth & Pacific group chief executive William McComb said that after assessing the market values of its Juicy and Lucky brands, the group “concluded that the best way to increase shareholder return would be by monetizing the value of Juicy Couture’s powerful trademarks today to further de-risk our company and its ability to execute over time.”
McComb added: “Ultimately, this is all about bringing Kate Spade to its full potential.”
The chief executive echoed this sentiment on Tuesday, stating: “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.”
Fifth & Pacific said it expects the Lucky Brand deal to close in the first quarter of 2014.