Lee Now Belongs to Authentic Brands Group, Which Will License the Denim Brand Out Market by Market

Lee has a new owner. Authentic Brands Group said on Tuesday, November 3, that it has completed its purchase of the intellectual property of Lee from Kontoor Brands, and Kontoor confirmed the sale the same day. The deal was agreed in May, valued by Kontoor at up to $1 billion: $750 million up front and a $250 million earnout tied to how Lee performs under Authentic.

What Authentic bought is the name, not the factories. It doesn't make clothes itself; it owns brands and licenses them to companies that do. For Lee it has signed four apparel partners so far: One Jeanswear Group for the U.S. and Canada, Experience Group for Europe, HiMaxx for mainland China, Hong Kong and Macao, and Union Group for Mexico. Authentic says more licensees will follow to take Lee into activewear, workwear and lifestyle products.

"Lee has the heritage, recognition and consumer loyalty we look for in a brand," Jamie Salter, Authentic's founder and executive chairman, said in the release. By Authentic's figures, Lee was founded in 1889 and generates about $1.5 billion a year in retail-equivalent sales across 73 countries, nearly 40% of it outside the U.S. and Canada.

What Kontoor keeps

Kontoor's own description of itself now names Wrangler and Helly Hansen. "We now have a more focused, growth-oriented portfolio positioned to deliver stronger returns for our shareholders," its chief executive and chairman, Scott Baxter, said. Kontoor reports its third-quarter results on Thursday, November 5.

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Lee goes into a portfolio that already includes Reebok, Champion, Brooks Brothers, Lucky Brand and OVO, so the brand's direction now depends less on one owner and more on four regional operators and whoever signs next. That model tends to mean more Lee, in more categories and more places, and the risk that comes with it is a heritage denim name spread thin. In the near term, collaborations already in motion carry on: WACKO MARIA's Lee Storm Rider goes on sale on November 7, four days after the sale closed. Neither company has said whether the final price differs from the terms agreed in May.