New York—In a move to put emphasis on its lucrative Kate Spade brand, Fifth & Pacific Cos. Inc. today agree to sell intellectual rights to its Juicy Couture brand to brand-licensing firm Authentic Brands Group for $195 million.
As part of the deal, Fifth & Pacific also reached a short-term licensing agreement with the group to allow for an orderly transition through the first half of next year.
Earlier this year, Fifth & Pacific announced it would be looking for new homes for Juicy Couture, which it bought a decade ago, and Lucky Brands.
Juicy Couture, which gained notoriety on its track suit styles, posted a 6.4% decline in sales last year to $498.6 million, on top of a drop in 2011. In the first half of this year sales continued to fall 10.7%. Meanwhile, Kate Spade saw sales jump 48% last year to $462 million with comp direct-to-consumer sales rising 30%.
“Ultimately, this is all about bringing Kate Spade to its full potential,” said William L. McComb, chief executive, said.
No Word Yet on Lucky Brand’s Fate
“In the coming weeks and months, we anticipate that Authentic Brands Group will announce licensees and affiliates that will work to take over elements of the operating business, including many of the company’s talented associates, retail stores, wholesale, international, and certain components of the ecommerce site,” McComb said. “We plan to work closely with these entities to ensure a smooth and orderly transition that is seamless to consumers and our business partners.”
Restructuring and other transition costs and charges are expected to be significant, McComb added. However, specific details weren’t provided.
“We will have much more to say in the coming weeks about the transition of the operating components of the business, the associated restructuring costs and key impacts on our financial outlook,” McComb said.
Authentic Brands, a unit of Leonard Green & Partners that also includes brands such as Hickey Freeman, Marilyn Monroe and Judith Leiber, will get a $10 million guaranteed minimum royalty from Fifth & Pacific.
As for the disposition of Lucky Brand wasn’t immediately apparent either since Fifth & Pacific said the company wasn’t “prepared at this time to make comments on any process or decisions about Lucky Brand.”
Lucky Brand’s sales last year fell 10% sales to $462 million.