Public offering bankrolls Levi’s expansion
LEVI Strauss & Co.’s return to the stock market got an enthusiastic reception from investors who believe the iconic brand is ready for a comeback and has a lot more room to grow.
The stock opened for trading Thursday at $US22.22, above the $US17 offering price and blowing past the originally expected range of $US14 to $US16. As of Thursday’s close, shares popped nearly 32 per cent, closing at $US22.41 per share.
That gave Levi’s a market value of $US8.64 billion, according to FactSet. Levi’s seems to have successfully convinced investors, at least for now, that it has a lot of opportunities to expand beyond just jeans, from tops to bolstering its women’s business.
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 last year totalled 824. But jeans are still the company’s mainstay and that was apparent on Thursday when, in a rare move, the New York Stock Exchange suspended its “no jeans” policy to commemorate Levi’s re-entry, transforming the floor from suits and ties into a sea of blue denim, with its traders sporting jeans and denim jackets. More than 120 employees from Levi’s global offices, including its CEO Chip Bergh outfitted in denim, were on the trading floor.
On Wednesday, the NYSE even tweeted, “Tomorrow we’ll be in our 501s”. The 166year-old company is proving to Wall Street there’s staying power for a legacy name that dates back to 1853 when its namesake founder started a wholesales dry goods business in San Francisco.
Levi’s previously went public in 1971, but Strauss’ descendants, the Haas family, took it private again in 1985.