Levi Strauss & Co. is seeing interest from potential buyers for its Dockers brand, according to Chief Financial Officer Harmit Singh. Speaking in an interview with Bloomberg Radio’s Tim Stenovec and Molly Smith, Singh noted that the company expects the sale process to take six to nine months. He emphasized Levi’s goal of finding a buyer capable of elevating the Dockers brand while Levi focuses on expanding its core Levi’s brand.
“The phones are ringing, which is good news,” Singh said, expressing optimism about the interest in Dockers. This marks Levi’s second attempt to sell the khaki-centric brand. Over two decades ago, Levi sought to sell Dockers when its sales were around $1 billion but did not receive what it deemed “appropriate” offers. Today, Dockers’ sales are on track to be about a third of that amount.
The decision to sell Dockers aligns with Levi’s broader strategy to appeal to investors by concentrating on its more profitable segments. This includes growing direct-to-consumer sales through its stores and online platforms, as well as expanding brands like Beyond Yoga. Levi’s stock has underperformed the S&P 500 Index so far this year, with investors expressing disappointment in the company’s most recent earnings report.
Despite Dockers’ recent decline, Singh remains confident in the company’s ability to successfully sell the brand. He explained that the current situation differs from Levi’s previous attempt to offload Dockers because the brand now operates under its own dedicated management team. This shift occurred about two years ago when Levi established a separate team for Dockers, allowing it to function independently from Levi’s core business.
“In the past, Dockers was run by the same team that was managing Levi’s,” Singh said in a separate interview with Bloomberg News. “The difference now is that Dockers has its own management, and we’re positioned to sell it.” However, despite this setup, Dockers’ sales continued to decline over the past two years. Singh acknowledged that the company’s efforts to turn the brand around had not been successful, leading to the decision to pursue a sale.
“The best definition of insanity is doing the same thing again and again and expecting a different result,” Singh noted. “So we decided it’s probably a good time to exit and narrow our focus.”
While Dockers has faced challenges, Singh remains hopeful that the brand could thrive under new ownership. He cited his previous experience with spin-offs, such as when he worked with PepsiCo during the separation of its restaurant chains, which eventually became Yum! Brands Inc.
As part of its strategy to focus on higher-growth areas, Levi has already exited other product lines, including footwear and its Denizen brand, which had been sold at Target. The sale of Dockers marks another step in Levi’s plan to streamline its operations and concentrate on its strongest-performing brands.
