KONTOOR BRANDS AGREES TO SELL LEE DENIM LABEL TO AUTHENTIC BRANDS GROUP IN DEAL WORTH UP TO $1 BILLION. (PHOTO).

 Kontoor Brands agrees to sell Lee denim label to Authentic Brands Group in deal worth up to $1 billion

Kontoor Brands has agreed to sell its Lee denim label to Authentic Brands Group in a deal that could reach up to $1 billion, with closing expected in the second half of the year, the companies said Thursday.

The transaction includes an upfront payment of $750 million, along with a potential additional $250 million earnout tied to Lee’s future performance under its new ownership. Kontoor’s board unanimously approved the sale, which shifts Lee into a licensing-based model once the deal is completed.

The decision marks an exit from Kontoor’s effort to revive the long-standing denim brand, which the company recently placed on the market after an internal review of its portfolio. Analysts had broadly anticipated a lower valuation, making the final price higher than expected and surprising some industry observers.

Following the sale, Kontoor will focus on its remaining brands, including Wrangler and outdoor label Helly Hansen. Executives said Lee had become a distraction from the company’s core growth strategy, noting that the brand required sustained investment to remain competitive.

Lee, which was previously part of VF Corp before Kontoor was formed in 2018, generates roughly $1.5 billion in annual retail-equivalent sales across more than 70 countries, with the majority coming from North America. Under Authentic Brands Group, the label will transition to a licensing structure, with plans to partner with operators to expand its reach across lifestyle categories, content, and brand experiences.