Levi Strauss readies for prime time in the public markets

Daniel Fowler
March 23, 2019

Following the initial public offering price of $17 per share, San Francisco's Levi Strauss & Co. closed at $22.41 per share on March 21, up $5.41, a 31.82 percent increase.

This company designs, markets and sells products that include jeans, casual and dress trousers, tops, shorts, skirts, jackets, footwear and related accessories for men, women and children around the world under the Levi's, Dockers, Signature by Levi Strauss and Denizen brands.

The 166-year-old company first went public in 1971, but has been private for the last 34 years.

The price surged more than 30% when trading opened in NY on Thursday, valuing the company at $8.7bn (£6.7bn).

Chris Beauchamp, chief market analyst at online trading platform IG, said: "The initial public offering (IPO) of Levi's has gone well, with an initial pop on the first day of trading".

The company also recognized in 2014 that no matter how strong a brand, may be if it isn't the right material, a sale can't happen, Bergh said. "We're here to run the business for the long term".

In its prospectus, the company says it plans to use the proceeds from the public offering to expand more aggressively into China, India and Brazil and also build out more retail stores, which as of late past year totalled 824.

Levi Strauss originated the denim blue jeans that bear his name after opening a wholesale dry goods business in San Francisco in the 1830s. In 1873 Strauss and Jacob Davis received a patent on the process of riveting pants

"That's why now is a great time for Levi's to capitalize on this momentum". The company originally expected to price its 36.67 million shares in the range of $14 to $16.

The Haas family will retain 80% of voting control of the public company.

"There is a lot to like when it comes to Levi Strauss the brand and its outlook moving forward", said Jeff Zell, senior research analyst and partner at IPO Boutique.

All of that has helped Levi Strauss turn in a 14 percent increase in sales to $5.6 billion for the year ended November 25, 2018.

Investors said the strong demand for shares in Levi, which owns the Dockers and Denizen brands, is a good sign for other companies eyeing an IPO this year. To commemorate its first day of trading, Levi's hosted a tailor shop outside the stock exchange.

Levi's is also defying a trend among rival fashion retailers and brands like Gap Inc. and Wrangler parent VF Corp. that are splitting up to stay viable.

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