Strong IPO Boosts Levi Strauss Market Cap To $8.7 Billion

Darnell Taylor
March 23, 2019

Underwriters have a 30-day option to purchase up to an additional 5.5 million shares of Class A common stock from Levi Strauss & the IPO price, less underwriting discounts and commissions. Levi's priced its shares at $17, which could give the company a $6.6 billion valuation.

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". 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.

The move comes as the iconic brand is staging a comeback under its CEO Chip Bergh even as it faces increasing competition and a changing retail landscape. And Levi's is also contending with a shrinking number of department stores, once its traditional venue of distribution.

Levi's, like many denim brands, still face challenges. And discounters like Walmart have been developing their own exclusive brands.

The brand made its return to the New York Stock Exchange under the symbol "LEVI".

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Levi first went public in 1971. It also is expanding its retail stores. After 14 years, it was taken private by the Haas family, the descendants of founder Levi Strauss, in a $1.6 billion leveraged buyout.

In 2017-18, global sales of jeans expanded by 4.3%, according to Euromonitor International, a market research provider.

The company dates back to 1853 when its founder started a dry goods business in San Francisco.

Bergh said a desire among existing shareholders to diversify, coupled with strong corporate performance and supportive market conditions, led to the decision to go public in 2019.

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