NEW YORK (TheStreet) - Fifth & Pacific (FNP) shares surged nearly 5% to $25.61 after the specialty apparel company said it had agreed to sell its Juicy Couture brand name and related intellectual property assets to Authentic Brands Group for $195 million in cash.

The New York-based specialty retailer, which also owns global lifestyle retail brands including Kate Spade, Lucky and other licensed lower-end brands, also entered into a short-term licensing agreement that allows ABG, a part of private-equity firm Leonard Green & Partners, to transition the business in an orderly fashion through the first half of 2014. Fifth & Pacific will pay a $10 million guaranteed minimum royalty to ABG. The company will be working with ABG in the coming weeks and months for an orderly transition of the brand.

Fifth & Pacific was rumored to be seeking a buyer for both Juicy, best known for its colored, velour sweat suits, and for Lucky Brand, which sells both men's and women's fashion apparel and denim as part of its mission to pare down its portfolio of brands.

The company, formerly known as Liz Claiborne, put both Lucky and Juicy on the block earlier this year so that it could solely focus on its strongest brand, Kate Spade, the Wall Street Journal said, citing people familiar with the matter.

The company was close to selling Lucky to private-equity firm Advent International but talks apparently broke down, the Journal says.

"This decision is the result of a process we began last year -- studying our resource allocation needs, our capital structure, and the operating risks and opportunities associated with a three brand portfolio while still maximizing shareholder value," Fifth & Pacific's CEO William L. McComb said in a statement.

"While working hard to accelerate the turnaround of Juicy Couture and continue the expansion of Lucky Brand Jeans, we also initiated processes to assess the market values of each of these assets. Despite our conviction and faith in the portfolio as a whole, we concluded that the best way to increase shareholder return would be by monetizing the value of Juicy Couture`s powerful trademarks today to further de-risk our company and its ability to execute over time. Ultimately, this is all about bringing Kate Spade to its full potential," McComb added.

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Shares have performed well this year, vastly outpacing the gains in the broader indexes. The stock is up 97% since December 31, 2012.

Fifth & Pacific expects to incur "significant" restructuring and transition charges related to the Juicy Couture business, including expenses related to assignment or termination of leases, severance costs, impairment charges and other expenses.

"We will have much more to say in the coming weeks about the transition of the operating components of the business, the associated restructuring costs and key impacts on our financial outlook," McComb said.

"In the end, we believe that all of our brands will have a very bright future, and today`s announcement will help to ensure that. We are not prepared at this time to make comments on any process or decisions about Lucky Brand. If and when we have news to announce on Lucky, we will do so," McComb said.

Authentic Brands Group, in partnership with Leonard Green & Partners, is an intellectual property corporation with a mandate to acquire, manage and build long-term value in prominent consumer brands, the release said. The New York company's brands include Marilyn Monroe, Judith Leiber, Adrienne Vittadini, Misook, Taryn Rose, Hickey Freeman, Hart Schaffner Marx, Palm Beach, Spyder, Prince, Ektelon, Viking, Bobby Jones, TapouT and Sportcraft.

"Juicy Couture is a leading lifestyle brand that is recognized worldwide. We are honored and excited to build upon Juicy Couture`s unique heritage and to realize the brand`s significant global potential," Chairman and CEO Jamie Salter said.

--Written by Laurie Kulikowski in New York.

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