Levi Strauss files for IPO, seeks listing under ‘LEVI’
Levi Strauss & Co. filed for a public offering — a sign the iconic maker of denim pants and jackets is betting it can overcome growing competition in the apparel industry.
It filed paperwork with an initial offering size of US$100 million, a placeholder amount that’s used to calculate fees and will typically change. CNBC reported that the denim maker is looking to raise $600 million to $800 million.
The company’s ticker would be “LEVI.”
The company, founded in the 1800s, intends to use the proceeds from an IPO for “general corporate purposes, including working capital and capital expenditures.” Levi may also use the cash for “acquisitions or other strategic investments, although we do not currently have any plans to do so.”
The IPO would be led by Goldman Sachs & Co., Morgan Stanley and JPMorgan Chase & Co.
The announcement roiled the shares of apparel companies, with American Eagle Outfitters Inc., Gap Inc. and Urban Outfitters Inc. all falling sharply.
Levi Strauss is looking to tap the market at a time of increased competition for the denim industry. Consumers are buying more athletic apparel — and that has eaten into the cash they spend on jeans.
The denim market “is better than a couple of years ago,” said Chen Grazutis, an analyst for Bloomberg Intelligence. “It’s steady, with low-single-digit growth.”
The San Francisco-based company has been expanding overseas, with 45 per cent of its sales now coming from outside the Americas. Its revenue hit $5.6 billion in its year ended November 2018.
Levi Strauss sees a “significant opportunity” to boost its presence in emerging markets such as China, India and Brazil.
According to the filings, the company sees opportunity for growth in women’s apparel and tops.
“A lot of their opportunities are outside of denim, bringing the brand to other categories as well,” Grazutis said.