Fifth & Pacific to Unload Lucky Brand in $225 Million Deal

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Holiday fun at Lucky Brand

New York—Just months after indicating its strategy going forward is to concentrate on its Kate Spade brand, Fifth & Pacific today announced it reached a $225 million deal to sell off its Lucky Brand business to Leonard Green & Partners, a private equity firm.

In October, Fifth & Pacific (formerly Liz Claiborne Inc.) revealed it had also sold off its Juicy Couture brand in a $195 million deal with Authentic Brands Group, a unit of Leonard Green.

Focus Resources on Kate Spade

“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. This is all about bringing Kate Spade to its full potential,” Fifth & Pacific CEO William McComb said.

Based in Los Angeles, Leonard Green has a rising resume of investments in the retail industry, including BJ’s Wholesale Club, J. Crew and the Whole Foods.

Lucky Brands reported a sales jump of 7.3% to $120 million last quarter. The brand’s $225 million price tag represents a multiple of more than seven times the brand’s latest 12 months pro forma adjusted standalone earnings before interest, depreciation and amortization (EBITDA).

Fifth & Pacific said Leonard Green will pay $140 million in cash at the time of closing and the remaining in the form a three-year seller note. The deal is expected to close in the first quarter of 2014.

Centerview Partners and Perella Weinberg Partners advised Fifth & Pacific on the deal.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com