Kontoor Brands is selling Lee jeans to Authentic Brands Group in a deal worth up to $1 billion

Under the terms of the agreement, Reuters reports that Kontoor will receive $750 million upfront, with the remaining $250 million contingent on Lee's performance once it moves to Authentic's stewardship. Kontoor's board gave unanimous approval to the sale, which regulators must still clear before it can be finalized, with both companies targeting completion sometime before year-end 2026.

Authentic plans to convert Lee into a licensing model once the deal closes, the company said. Talks are already underway with potential brand operators who would take on Lee's day-to-day business and pursue growth in areas including content, experiences, and heritage-driven lifestyle categories, Authentic said.

"What makes Lee so compelling is its legacy," said Jamie Salter, founder and executive chairman of Authentic, in a statement. "It's one of the most important names in denim, with more than a century of heritage, consumer awareness and cultural relevance already built in."

The brand, which dates to 1889, has a global footprint spanning 73 countries and produces roughly $1.5 billion in annual retail-equivalent sales; markets beyond the U.S. and Canada account for close to four in ten of those dollars, the company said.

For Kontoor, the sale is a deliberate move to concentrate resources on its remaining brands. "By increasing our focus on Wrangler and Helly Hansen, two iconic brands with significant white space opportunities, we are better positioned to fuel a higher growth profile and create even greater value for our shareholders," said Scott Baxter, president, CEO and chairman of Kontoor Brands, according to WWD. Shedding Lee gives Kontoor the latitude to redirect capital toward what the company describes as segments with stronger structural growth potential, spanning denim, outdoor, and workwear.

The Lee acquisition fits a broader pattern for Authentic, which named Matt Maddox as its new CEO this week, with Salter transitioning to executive chairman. At the heart of Authentic's business model is a straightforward playbook: purchase the intellectual property behind well-known names and hand off operations to third-party partners who pay for the right to use those assets. Its portfolio includes more than 50 brands — among them Reebok, Champion, Brooks Brothers, and Guess — generating roughly $38 billion in system-wide retail sales annually.

Salter has said he expects Authentic to go public within the next 12 months. On the advisory side, Kontoor tapped Morgan Stanley $MS for financial guidance and Foley & Lardner for legal work, while Authentic turned to Kirkland & Ellis as its counsel.