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.