UPDATE 1-Fifth & Pacific to sell Lucky Brand Jeans for $225 mln
* Says Leonard Green to pay $140 mln in cash at close
* Says remaining amount to be paid in the form of a 3-year seller note
* Deal leaves Fifth & Pacific with kate spade brand
Dec 10 (Reuters) - Fifth & Pacific Cos Inc said it would sell its Lucky Brand Jeans business to private equity firm Leonard Green & Partners LP for $225 million as it focuses on its fast-growing, higher-end kate spade brand.
The kate spade brand, which competes with offerings from Michael Kors Holdings Ltd and Coach Inc, has posted strong growth in sales in recent quarters as its trendy handbags, jewelry and shoes resonate with customers.
"We believe that by focusing all of our resources on the huge opportunity at Kate Spade, we can deliver the strongest value creation opportunity for our shareholders," Chief Executive William McComb said on Tuesday.
"This is all about bringing Kate Spade to its full potential."
Fifth & Pacific, formerly known as Liz Claiborne Inc, said Leonard Green will pay $140 million in cash at the time of closing and the remaining in the form a three-year seller note.
Lucky Brand sales rose 7.3 percent to $120 million in Fifth & Pacific's most recent quarter.
The apparel and accessories maker sold its once-popular Juicy Couture business to Authentic Brands, a unit of Leonard Green, for $195 million in October.
Fifth & Pacific said it expects the Lucky Brand deal to close in the first quarter of 2014.
Centerview Partners and Perella Weinberg Partners advised Fifth & Pacific. Paul, Weiss, Rifkind, Wharton & Garrison LLP was its legal adviser.
Latham & Watkins LLP was Leonard Green's legal adviser.
Fifth & Pacific's shares have more than doubled this year to close at $33.12 on Monday on the New York Stock Exchange.