Authentic Brands Group (ABG) has signed a deal to acquire denim brand Lee, with former owner Kontoor Brands praising the agreement as beneficial to all parties.

The $1 billion sale comes after Kontoor made public its intentions to narrow its focus on Helly Hansen and Wrangler, the flagship brands in its portfolio.

But ABG sees potential in Lee for the future, despite the iconic denimwear brand suffering declining revenues for three consecutive years. The brand continues to generate around $1.5 billion in annual retail-equivalent sales across 73 countries.

“What makes Lee so compelling is its legacy,” said Jamie Salter, founder and executive chairman of ABG. “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.”

Kontoor said the deal is subject to regulatory approval and customary closing conditions.

“The Lee transaction is a deliberate step to sharpen our brand portfolio and unlock investment capacity to fuel accelerated growth for the future of Kontoor,” said Scott Baxter, newly appointed president, CEO, and chairman of the board of Kontoor 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.”

ABG said it now plans to convert Lee into a licensing model, using its network of more than 1700 partners. 

“At Authentic, we focus on preserving what consumers love about their favorite brands while putting the right partners, distribution, and marketing strategies behind them to drive long-term growth. Lee is exactly the kind of brand we are built for,” Salter added.