NEW YORK — Jeanswear giant Levi Strauss & Co. said in a recent filing with the Securities & Exchange Commission that its lenders had agreed on the San Francisco company’s plan to sell its Dockers business, so long as a minimum price of more than $650 million is met.

Levi’s put its $1 billion Dockers unit on the block in May, hiring Citigroup Inc. to market the operation. There has been intense speculation as to what firms would want the hefty brand, though no bidders have disclosed their plans.

According to the SEC filing, Levi’s lenders amended their debt agreements to approve the proposed sale, as long as the deal reduces Levi’s net debt by at least 30 percent. At the end of its second quarter on May 20, Levi’s balance sheet showed $2.22 billion in long-term debt.

That would suggest the sale would have to bring in at least $667.3 million to be approved by lenders. That’s on the low end of the initial range of prices that financial observers suggested Dockers could generate. Early on, some said the brand could sell for $1 billion or more, though recent estimates focused on the $600 million to $700 million range.

When the firm put Dockers up for sale, president and chief executive officer Phil Marineau said Levi’s goal was “to pay down debt and strengthen ourselves financially.” But company executives, and officials with turnaround firm Alvarez & Marsal, which Levi’s hired in December, denied the sale was critical to the firm’s survival.

“This is not something that is absolutely essential to do,” Marineau said at the time. “We will not sell Dockers at any cost. We have a price we expect to get for it, and if we do not get that price, we will not sell Dockers.”

Levi’s has been in a prolonged sales slump. Since peaking at $7 billion in 1996, its revenues have dropped for seven consecutive years, last year coming in at $4.15 billion. Selling Dockers would significantly resize the company.

The list of potential bidders named by observers in the apparel industry and financial community has grown to include most firms capable of such a large purchase. Companies including VF Corp., Li & Fung, Kellwood Co., Jones Apparel Group and Liz Claiborne Inc., along with Hong Kong investor Silas K.F. Chou, all have been named as potential bidders, though only two of those investors — VF and Kellwood — have publicly confirmed their interest. However, they have since sought to play down their interest.

This story first appeared in the September 9, 2004 issue of WWD. Subscribe Today.