Fifth & Pacific to sell Juicy Couture brand
NEW YORK Fifth & Pacific Companies Inc. said Monday that it is selling its Juicy Couture clothing brand to Authentic Brands Group for $195 million.
The company, formerly known as Liz Claiborne Inc., has been selling off the weaker parts of its business over the past few years to shift its focus to three key brands -- Juicy, Lucky Brand and Kate Spade.
While Fifth & Pacific was working to turn around its Juicy business and expand its Lucky Brand Jeans unit, it also was gauging the market value for each. The company said Monday that it determined that selling Juicy was the best way to increase shareholder value. The move, the company said, is about bringing Kate Spade to its full potential.
Juicy Couture, best known for its signature sweatsuits that had the word "Juicy" across the backside, also sells handbags and jewelry.
Authentic Brands, which is owned by private equity firm Leonard Green & Partners, is a New York-based company that acquires intellectual property of consumer brands. Its brands include Judith Leiber, Adrienne Vittadini and Sportcraft.
Fifth & Pacific also struck a short-term licensing agreement with Authentic Brands as part of the transition to hand over the business. The agreement guarantees Authentic Brands a $10 million royalty payment.
The all-cash deal is expected to close in November.
Fifth & Pacific said it expects "significant" restructuring and other costs associated with the deal but did not give a specific measurement.
Shares of Fifth & Pacific jumped $1.02, or 4.2 percent, to $25.57 in midday trading. Its stock is trading at the upper end of its 52-week trading range of $9.98 last October to $26.11 in mid-August.