Levi Strauss to acquire operating assets from distributor The Jeans Company
Levi Strauss & Co. announced it has entered into an asset purchase agreement to acquire all operating assets related to the Levi's and Dockers brands from The Jeans Company, LS&Co.'s distributor in Chile, Peru and Bolivia, for approximately $35M, plus transaction costs. This includes approximately 80 Levi's and Dockers retail stores, distribution with the region's leading multi-brand retailers, and the logistical operations in these markets. LS&Co. has stopped shipping inventory to TJC in anticipation of the transition of operations, which will have an estimated impact of approximately $20M on LS&Co. revenues in the second half of 2019. The impact on revenue will be distributed roughly evenly between the third and fourth fiscal quarters. LS&Co. does not expect any similar negative revenue impact to fiscal 2020. Completion of the transaction is subject to a number of closing conditions. Subject to such conditions, the transaction is expected to close by the end of the year. During this time, Levi's and Dockers stores in the region are expected to remain open for business without interruption. "Deploying capital through organic acquisitions is a key part of our long-term strategy to become a world-class omni-channel retailer. This transaction will further diversify our business, create operational synergies and enhance shareholder value," said CFO Harmit Singh.