Investing.com -- Levi Strauss (NYSE:LEVI) shares rose in after-hours trading Friday following comments to Bloomberg from Chief Financial Officer Harmit Singh regarding the potential sale of its Dockers brand.
According to Singh, the company has received interest from potential buyers, with “phones ringing,” signaling positive news.
In an interview with Bloomberg Radio, Singh stated the sale process is expected to take six to nine months. He explained that Levi’s is seeking a buyer who can elevate the Dockers brand while Levi focuses on expanding its core offerings.
This isn’t Levi’s first attempt to sell Dockers. Two decades ago, when the khaki brand was generating around $1 billion in annual sales, Levi failed to find suitable offers.
Now, with Dockers sales projected to be about one-third of that amount for 2023, the company is trying again.
The sale is said to align with Levi’s broader strategy to win over investors by selling more products directly through its own stores and websites, while also focusing on the growth of its Beyond Yoga brand.
Bloomberg noted that Levi’s stock has underperformed the S&P 500 this year, disappointing Wall Street with its most recent earnings report.
Singh told Bloomberg News that the brand is better positioned for a sale now, thanks to the establishment of a dedicated management team. “The difference between then and now is that Dockers has a dedicated management team,” Singh said, adding that previously, the same team managed both Dockers and Levi’s.
Although efforts to turn Dockers around have fallen short, Singh explained that it was time to narrow Levi’s focus. “The best definition of insanity is doing the same thing again and again and expecting a different result,” he remarked.
Despite the challenges, Singh expressed optimism that Dockers could thrive under new ownership, citing his past experience with corporate spin-offs, such as the formation of Yum! Brands (NYSE:YUM) from PepsiCo (NASDAQ:PEP).
As part of its shift toward higher-growth opportunities, Levi has already discontinued footwear and its Denizen brand sold at Target (NYSE:TGT), said Bloomberg.
This content was originally published on Investing.com
