It’s in the jeans: Levi’s soars 31% in triumphant stock market return
bengaluru — Shares in Levi Strauss & Co surged 31 per cent in their debut on Thursday, giving the US jeans maker a market value of $8.7 billion and indicating a strong investor appetite ahead of much-awaited listings from Lyft and Uber Technologies.
The 165-year-old company’s return to the public market comes at a time when stocks are near alltime highs and the popularity of denim is surging, driven by the resurgence of the 90s styles such as high-waist and pinstriped jeans.
The self proclaimed inventor of the blue jeans, which has grown to become one of the world’s most recognized denim brands, hopes to use a part of the proceeds from the share offering to expand further into emerging markets such as Brazil, China and India.
“Denim continues to prove prevalent in streetwear and on the runway, so we’re not expecting it to go anywhere any time soon,” an analyst at retail analytics firm Edited said. “That’s why now is a great time for Levi’s to capitalise on this momentum.”
Levi first went public in 1971. It sold a total of 1.27 million shares at $47 each and the stock opened at $60, according to a
New York Times report. After 14 years as a public company, it was taken private by the Haas family, the descendants of founder Levi Strauss, in a $1.6 billion leveraged buyout.
Levi’s second IPO was priced at $17 on Wednesday, above the expected range, in an oversubscribed offering. The Haas family will retain 80 per cent voting control of the public company. The market capitalisation of the company is based on outstanding shares of about 390 million, which includes the over-allotment option.
“There is a lot to like when it comes to Levi Strauss the brand and its outlook moving forward,” said Jeff Zell, senior research analyst and partner at IPO tracking firm, IPO Boutique. “The company and the underwriters targeted a reasonable valuation to start and allowed the true investor demand to dictate price which ultimately came $1-above range.”
The company reported a 14 per cent rise in revenue to $5.6 billion in 2018, a majority of which came from men’s denim. —