The Denim Label Will Transition to a Licensing Model Following the Acquisition
Authentic Brands Group is adding another heritage label to its portfolio with the acquisition of Lee from Kontoor Brands in a deal valued at up to $1 billion.
Announced Thursday, the agreement includes an initial transaction value of $750 million, with an additional $250 million earnout tied to the future performance of the brand under Authentic’s ownership.
The transaction is expected to close in the second half of the year. Once completed, Authentic plans to transition Lee to its licensing-based business model, a strategy the company has used across many of its fashion and lifestyle holdings.
Founded in 1889, Lee currently generates approximately $1.5 billion in annual sales across 73 countries, with nearly 40 percent of revenues coming from markets outside the U.S. and Canada.
“What makes Lee so compelling is its legacy,” said Jamie Salter, Founder and Executive Chairman of Authentic. “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.”
Authentic said it is already in discussions with operating partners to support the next phase of Lee’s growth across apparel, experiences and heritage-focused lifestyle categories.
For Kontoor Brands, the sale marks a strategic shift toward concentrating resources around Wrangler and Helly Hansen. The company had previously announced plans to divest Lee as part of a broader portfolio repositioning.
“The Lee transaction is a deliberate step to sharpen our brand portfolio and unlock investment capacity to fuel accelerated growth for the future of Kontoor,” said Scott Baxter, President, Chief Executive Officer and Chairman of Kontoor Brands.
Kontoor said proceeds from the sale will be used for share repurchases and debt reduction.
The acquisition also comes during a pivotal moment for Authentic Brands Group itself. Earlier this week, the company announced that Salter would transition to Executive Chairman while President Matt Maddox assumes the role of Chief Executive Officer, part of a leadership evolution tied to Authentic’s anticipated public offering plans.
Authentic currently oversees a portfolio generating more than $36 billion in annual retail sales, with brands spanning fashion, sports, entertainment and lifestyle.
For Lee, the deal signals another major transition in its long history as heritage denim labels continue to evolve through licensing, global partnerships and lifestyle expansion strategies.