Kontoor Brands agreed to sell its Lee denim brand to Authentic Brands Group in a transaction valued at up to $1 billion, the companies said on Thursday.
Under the terms of the agreement, Reuters reports that Kontoor will receive $750 million upfront, with the remaining $250 million contingent on Lee’s performance once it moves to Authentic’s stewardship
Kontoor’s board gave unanimous approval to the sale, which regulators must still clear before it can be finalized, with both companies targeting completion sometime before year-end 2026. Authentic plans to convert Lee into a licensing model once the deal closes, the company said. Talks are already underway with potential brand operators who would take on Lee’s day-to-day business and pursue growth in areas including content, experiences, and heritage-driven lifestyle categories, Authentic said. “What makes Lee so compelling is its legacy,” said Jamie Salter, founder and executive chairman of Authentic, in a statement. “It’s one of the most important names in denim, with more than a century of heritage, consumer awareness and cultural relevance already built in.” The brand, which dates to 1889, has a global footprint spanning 73 countries and produces roughly $1.5 billion in annual retail-equivalent sales; markets beyond the U.S. and Canada account for close to four in ten of those dollars, the company said.
For Kontoor, the sale is a deliberate move to concentrate resources on its remaining brands. “By increasing our focus on Wrangler and Helly Hansen, two iconic brands with significant white space opportunities, we are better positioned to fuel a higher growth profile and create even greater value for our shareholders,” said Scott Baxter, president, CEO and chairman of Kontoor Brands, according to Yahoo Finance. Shedding Lee gives Kontoor the latitude to redirect capital toward what the company describes as segments with stronger structural growth potential, spanning denim, outdoor, and workwear. The Lee…