Fifth & Pacific plans to sell its Lucky Brand Jeans division to an affiliate of Leonard Green & Partners for $225 million so it can focus on its fast-growing Kate Spade brand.
"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,” said William L. McComb, CEO of Fifth & Pacific (formerly known as Liz Claiborne). “This is all about bringing Kate Spade to its full potential.”
The deal, which calls for $140 million of the sale price to be paid in cash at closing and the remaining $85 million to be financed in the form of a three year seller note, is expected to close in first quarter 2014.
“It is truly an historic day at Fifth & Pacific Companies — a return to our roots as a mono-brand company,” added McComb.
Fifth & Pacific said that Lucky Brand Jeans will assume the proportionate share of its sourcing contract with Li & Fung as well as some of its other obligations.