Kontoor Brands, Inc. signed a definitive agreement to sell its Lee business to Authentic Brands Group for up to $1 billion, including an initial transaction value of $750 million and a $250 million earn-out opportunity in future years based on the performance of Lee under Authentic’s ownership.
Kontoor announced on May 7 that it planned to divest Lee to better focus on its Wrangler and Helly Hansen businesses.
“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, CEO, and chairman of the Board, Kontoor Brands. “By increasing our focus on Wrangler and Helly Hansen, two iconic brands with significant white space opportunities, we are better positioned to fuel a higher growth profile and create even greater value for our shareholders.”
“I want to reinforce our commitment to support Lee through the sale process and to personally thank the Lee team for getting us to where we are today. We believe this is a great outcome for Kontoor, the Lee business and Authentic,” added Baxter.
In its statement, Authentic noted that the Lee brand “is a pioneer in denim and workwear with more than a century of cultural influence, innovation and craftsmanship behind it.” Lee generates approximately $1.5 billion in annual retail-equivalent sales across 73 countries, with nearly 40 percent coming from outside the US 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. At Authentic, we focus on preserving what consumers love about their favorite brands while putting the right partners, distribution and marketing strategies behind them to drive long-term growth. Lee is exactly the kind of brand we are built for.”
Upon closing of the transaction, Authentic plans to convert the Lee business into a licensing model, leveraging its brand-building expertise, network of more than 1,700 best-in-class partners and marketing and storytelling platform. The company is in discussions with brand operators to support Lee’s existing business and expand it across content, experiences and heritage-driven lifestyle categories.
The transaction is subject to certain standard closing conditions, including regulatory approval, and is expected to close in the second half of 2026.
Kirkland & Ellis LLP is acting as legal advisor to Authentic. Morgan Stanley is acting as financial advisor, and Foley & Lardner LLP is acting as legal advisor to Kontoor Brands, Inc.
Image courtesy Lee
