The move will include about 80 Levi’s and Dockers retail stores

The move will include about 80 Levi’s and Dockers retail stores

Levi Strauss & Co is to acquire all operating assets related to the Levi's and Dockers brands from The Jeans Company (TJC), the denim giant's distributor in Chile, Peru and Bolivia for around US$35m.

The move will include about 80 Levi's and Dockers retail stores, distribution with the region's leading multi-brand retailers, and the logistical operations in these markets.

"Over the course of our 30-year partnership, TJC has enhanced the market position of the Levi's and Dockers brands in Chile, Peru and Bolivia," says Roy Bagattini, president of the Americas region at Levi Strauss. "We believe the acquisition of these assets will build on the strong foundation established by TJC and will position us to accelerate growth across the Andean region."

The company's CFO, Harmit Singh, adds that organic acquisitions are a key part of Levi Strauss' long-term strategy to become a "world-class omni-channel retailer."

"This transaction will further diversify our business, create operational synergies and enhance shareholder value," he says. 

In a statement, Levi Strauss notes it has stopped shipping inventory to TJC ahead of the transition of operations, which it expects to have a US$20m impact on company revenues in the second half of 2019.

Subject to conditions, the transaction is expected to close by the end of the year. During this time, Levi's and Dockers stores in the region are due to remain open for business without interruption.

In its most recent quarterly results – the first since its initial public offering in March – Levi Strauss delivered strong top and bottom-line growth with net revenues up 7% on a reported basis to US$1.435bn.