Shares of Fifth & Pacific (FNP) surged almost 4% in Monday morning trading after the company announced that has sold a struggling business unit.
Authentic Brands Groups will pay $195 million to acquire the Juicy Couture brand. The once-trendy maker of velour apparel has resisted Fifth & Pacific’s efforts to turn around dwindling sales. Last year, Juicy’s revenue dropped 6.4%, Reuters noted.
In the first half of this year, Juicy’s sales slid another 10.7%. As part of the deal, Fifth & Pacific will pay Authentic Brands, owned by Leonard Green & Partners, at least $10 million in guaranteed royalty payments.
Fifth & Pacific is looking to focus on its popular Kate Spade line of handbags. The company is also said to be considering the sale of its Lucky Brand unit.
Details about the deal will be disclosed later this month.
Fifth & Pacific was formally known as Liz Claiborne Inc. The company changed its name last year.