Levi Strauss valued at $6.6bn as IPO prices above target
The US jeans maker is returning to the stock market after 34 years as a family business
Levi Strauss fetched a higher price than expected in its initial public offering on Wednesday, selling $623.3 million in shares as the US jeans maker looks to return to the stock market after 34 years as a family-owned company.
The success of the IPO underscores the diverging fortunes of retail companies. Tens of thousands of brick-and-mortar stores have closed in the last few years under pressure from e-commerce firms such as Amazon.com, but vendors with consistently popular offerings such as Levi have flourished, as they reach more shoppers through online channels.
With the stock market hovering near all-time highs, Levi said it priced its IPO at $17 share, just above its target range of $14 to $16, valuing the company at about $6.6 billion.
Levi Strauss, named for the man who popularised jeans and founded the company in 1853, is set to debut on the New York Stock Exchange on Thursday under the ticker "LEVI".
In the IPO, $462.4m worth of stock was sold by existing stockholders and the company sold $160.9m in shares.
Levi is setting the stage for a bumper year for IPOs that will also feature the likes of ride-hailing startups Lyft Iand Uber Technologies later this year. IPOs in the US amassed to $60.8bn in 2018, up 23 per cent from a year earlier and the highest since 2014, according to data provider Dealogic.
The popularity of denim is surging, driven by new styles such as high-waist and pinstriped jeans. Earlier this month American Eagle Outfitters and Abercrombie & Fitch posted strong results boosted by denim sales.
Levi reported net revenue of $5.8bn for the 12 months ending November 25, up from $4.9bn the year before. Net income was $285.2m, only slightly up from $284.6m a year earlier.
The Haas family, the descendants of Levi Strauss, will sell a small chunk of their shares and will continue to control the company. They took it private in 1985 in a $1.6bn leveraged buyout. Levi Strauss first went public in 1971.
The proceeds from the IPO will boost Levi Strauss' coffers to invest in broadening its product range.
Updated: March 21, 2019 08:22 AM