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Levi Strauss’ Latest Acquisition May Lead to Growth in South America

Levi Strauss & Co. is looking to expand its reach in South America.

The denim brand said Tuesday that it will acquire all operating assets related to Levi’s and Dockers brands from The Jeans Company (TJC), which it uses for distribution in South America. The $35 million acquisition includes roughly 80 Levi’s and Dockers retail stores, distribution with the region’s leading multi-brand retailers and the logistical operations in these markets.

The move, according to Levi’s, is all about growth.

“Over the course of our 30-year partnership, TJC has enhanced the market position of the Levi’s and Dockers brands in Chile, Peru and Bolivia,” said Roy Bagattini, president of the Americas region at LS&Co. “We believe the acquisition of these assets will build on the strong foundation established by TJC and will position us to accelerate growth across the Andean region.”

Chief financial officer Harmit Singh added that the move will help streamline business operations and ultimately increase value for both the business and its shareholders.

“Deploying capital through organic acquisitions is a key part of our long-term strategy to become a world-class omnichannel retailer,” Singh said. “This transaction will further diversify our business, create operational synergies and enhance shareholder value.”

The transaction is expected to close by the end of the year, and Levi’s said it could contribute to a roughly $20 million revenue hit in the second half of 2019, owed to transition operations, and the company has stopped shipping inventory to TJC in preparation.

In the meantime, Levi’s and Dockers stores in the affected regions will operate as usual.