Canadian Tire said on Wednesday it would sell its premium workwear business Helly Hansen to Kontoor Brands for C$1.28 billion ($901.2 million), as part of efforts to focus on its core business.
The transaction is expected to close in the second quarter, the company said. Canadian Tire expects to continue selling Helly Hansen products under a multi-year supply agreement.
The company expects to use the deal proceeds for share repurchases, to cut debt and to drive growth in its core Canadian retail business.
Canadian Tire, which sources about 15% of its goods directly from the U.S., said earlier this month that increasing inflationary pressures sparked by President Donald Trump’s tariff threats would retain pressure on spending.
The retailer, struggling with sluggish discretionary spending, had also said it was reviewing U.S. products and suppliers while seeking alternatives to rising cost pressures.
Kontoor Brands, the owner of jeans brands Lee and Wrangler, has reported demand recovery, thanks to growth in its global direct-to-consumer segment as well as wholesale business in the U.S.
Shares of Kontoor Brands were down about 4% in premarket trading.
Source: Reuters.com