Juicy Couture Sold to Authentic Brands Group
Juicy Couture, the luxury casual line born in Los Angeles and scooped up by a New York company a decade ago, has been sold by Fifth & Pacific for $195 million to Authentic Brands Group.
The sale was announced Oct. 7 after a vote by Fifth & Pacific’s board of directors. Fifth & Pacific, formerly known as Liz Claiborne Inc., bought the line in 2003 and sent it sailing with ritzy retail shops and fancy advertisements in glossy fashion magazines.
But in the last few years, the label has had a few missteps and seen its sales diminish, prompting Fifth & Pacific to shed the division.
Authentic Brands Group, a unit of Leonard Green & Partners, is a brand-management firm that acquires the intellectual-property assets of brands. Last month it acquired Spyder Active Sports. Spyder and, now, Juicy are part of a portfolio that includes Hart Schaffner Marx, Hickey Freeman, Judith Leiber, Tapout, Taryn Rose, Adrienne Vittadini, Bobby Jones and Marilyn Monroe.
"Juicy Couture is a leading lifestyle brand that is recognized worldwide. We are honored and excited to build upon Juicy Couture's unique heritage and to realize the brand's significant global potential," said Jamie Salter, chairman and chief executive officer of Authentic Brands Group, which is headquartered in New York.
Fifth & Pacific started re-evaluating the Juicy Couture brand after sales started to slip in the last few years. Last year, Juicy Couture’s revenues declined 6.4 percent to $498.6 million on top of a drop in 2011. During the first half of this year, sales shrunk 10.7 percent to $192 million.
That is a drastic departure from Fifth & Pacific’s other main brand, Kate Spade, the line of handbags and accessories that saw a 64.3 percent rise in revenues during the first half of this year to $307 million.
“With this sale, we have also entered into a short-term licensing agreement with Authentic Brands Group that allows us to transition the business in an orderly fashion through the first half of 2014, with a $10 million guaranteed minimum royalty payable to Authentic Brands Group,” said William McComb, Fifth & Pacific’s chief executive. “In the coming weeks and months, we anticipate that Authentic Brands Group will announce licensees and affiliates that will work to take over elements of the operating business, including many of the company's talented associates, retail stores, wholesale, international and certain components of the e-commerce site. We plan to work closely with these entities to ensure a smooth and orderly transition that is seamless to consumers and our business partners."
Juicy Couture got on people’s fashion radar in 2001 when the brand’s founders, Pamela Skaist-Levy and Gela Nash-Taylor, fashioned a velour track suit for Madonna, who launched a new trend—sexy sweats.
Fifth & Pacific is still looking for a buyer of its Lucky Brand label, another Los Angeles–founded company with headquarters in downtown Los Angeles. During the first half of this year, net sales for Lucky Brand totaled $226.4 million, compared with $212.4 million last year.