Fifth & Pacific has entered into a definitive agreement to sell the intellectual property of the Juicy Couture brand. Consummation of this transaction is subject to customary closing conditions and is expected to occur in November.
William L. McComb, Chief Executive Officer of New York headquartered Fifth & Pacific Companies, said, “We announced that we have signed an agreement to sell the intellectual property of the Juicy Couture brand to Authentic Brands Group (ABG) for 195 million dollars, payable in cash. 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 dollars guaranteed minimum royalty payable to Authentic Brands Group.”
“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 ecommerce 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,” McComb added.
Jamie Salter, Chairman and Chief Executive Officer of Authentic Brands Group commented, “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.”
McComb concluded saying, “We will have much more to say in the coming weeks about the transition of the operating components of the business, the associated restructuring costs and key impacts on our financial outlook. While the restructuring and other transition costs and charges will likely be significant (including costs associated with the assignment or termination of leases, severance, impairment charges and other associated transition activities), now that the transaction has been announced, we will seek to minimize these costs through discussions among us, ABG, its licensees and our landlords, employees and other providers regarding the transition plan for the Juicy Couture business.”