Fifth & Pacific Cos Inc FNP.N on Monday said it has agreed to sell its once-popular Juicy Couture business to Authentic Brands Group for $195 million to focus on its fast-growing, higher-end Kate Spade brand.
Juicy, known for its velour track suits and urban feel, saw sales plummet in recent years as the brand fell out of favor. Attempts to turn around what was still Fifth & Pacific's top selling brand last year failed.
Juicy revenue declined 6.4 percent last year to $498.6 million, on top of a drop in 2011. The deterioration worsened in the first half of this year, when sales fell 10.7 percent.
In contrast, Kate Spade, a popular brand of handbags, jewelry and shoes that competes with Michael Kors (KORS.N) and Coach Inc (COH.N), posted a sales rise of 64.3 percent in the first half.
"Ultimately, this is all about bringing Kate Spade to its full potential," Fifth & Pacific CEO William McComb said of the decision to sell Juicy. Details on restructuring and transition costs will be disclosed in the coming weeks.
Authentic Brands, a unit of Leonard Green & Partners that also includes brands such as Hickey Freeman, will get a $10 million guaranteed minimum royalty from Fifth & Pacific.
Centerview Partners and Perella Weinberg Partners advised Fifth & Pacific Cos on the deal.
McComb said he had no update on any deal involving Lucky Brand, the company's other major name. Sources told Reuters this summer that Fifth & Pacific was close to selling the brand.
Fifth & Pacific shares were up 0.8 percent to $24.75
(Reporting by Phil Wahba in New York; Editing by Gerald E. McCormick and John Wallace)