Levi Strauss Aiming For US$6.17 Billion Market Valuation With New IPO

Levi Strauss
People shop in the Levi Strauss store at Macy's Department store in New York City (Photo: Reuters)

After three decades of being off the market, the popular jeans maker Levi Strauss is finally back through another initial public offering (IPO). The company announced that it is expecting to raise more than US$587 million through the new IPO. If the company does hit that target, it's market valuation should go up to US$6.17 billion.

Apart from its outstanding 385.5 million shares, the jeans maker will be offering an additional 36.7 million shares. During its listing, the company will initially sell each share between US$14 to US$16. According to its IPO filing, the company will be listed on the New York Stock Exchange under the label "LEVI." The IPO is currently being handled by a team of underwriters from Morgan Stanley, JPMorgan, Merrill Lynch, and Goldman Sachs.

The company's decision to launch another IPO was reportedly driven by the resurgence of denim in the fashion scene. Retro-styled denim wear, such as high-waist and pinstriped jeans, have apparently come back in fashion. Demand for these stylish denim has so far increased, as indicated by the recent boost in Levi Strauss' sales. As indicated in the company's latest earnings report, Live Strauss was able to generate revenue of US$5.6 billion in 2018.

While the majority of the revenue came from the company's denim line, some of the revenue had also come from its other products. Aside from its denim line, Levi Strauss also sells wallets, belts, and footwear. Denim rivals such as Abercrombie & Fitch and American Eagle Outfitters have also posted strong results in denim sales over the past few months.

According to the company's regulatory filing, part of the additional funds that will be coming in from the IPO will apparently be used for new acquisitions. Acquiring other manufacturing will give the company an easy way to expand its portfolio of brands. It will also expand their line of denim, which may include other types of clothing outside of regular jeans. The company has yet to reveal any details of any possible immediate takeovers.

As part of its campaign to attract younger customers, part of the proceeds from the IPO will reportedly go towards expanding the company's tailor shop and print bar. These types of custom shops will let customers customize their jeans and shirts with their own designs. The 165-year-old company is aiming to evolve into a new global lifestyle leader through its new innovative approach to fashion. Levi Strauss is part of a new age of high-profile companies now seeking to go public within the year. Some of the companies that have expressed interest in going public this year include Uber, Pinterest, and Airbnb. 

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