Coverage: Levi Strauss goes public again

Levi Strauss & Co. said it sold $623.3 million in shares in its initial public offering on Wednesday, as the U.S. jeans maker looks to return to the stock market after 34 years as a family-owned company.

Joshua Franklin and Uday Sampath Kumar of Reuters had the news:

With the stock market hovering near all-time highs, Levi priced its IPO at $17 share, just above its target range of $14 to $16, valuing the company at about $6.6 billion.

Levi Strauss is set to debut on the New York Stock Exchange on Thursday under the ticker “LEVI”.

The success of the IPO underscores the diverging fortunes of retail companies. Tens of thousands of brick-and-mortar stores have closed in the last few years under pressure from e-commerce firms such as Amazon.com Inc, but vendors with consistently popular offerings such as Levi have flourished, as they reach more shoppers through online channels.

In the IPO, $462.4 million worth of stock was sold by existing stockholders and the company sold $160.9 million in shares.

Leslie Picker and Thomas Franck of CNBC.com reported that the IPO had a huge demand:

Blue jeans giant Levi Strauss & Co.’s Thursday initial public offering is more than 10 times oversubscribed, three sources familiar tell CNBC.

The world’s largest jeans seller is expected to list nearly 37 million shares on the New York Stock Exchange at a price between $14 and $16 under the symbol LEVI.

The sources said it was likely to price above that range, but the situation is still fluid and dependent on market conditions.

Members of the Haas family will sell more than 21 million shares in the IPO. At $15 a share, the midpoint of the expected range, the value of the family’s collective proceeds would be nearly $317 million.

Lauren Debter of Forbes noted the company’s fast-growing women’s business:

Tops and women’s jeans are now the fastest-growing parts of its business. In 2018, revenue from its tops grew 38% to $1.1 billion, driven by the popularity of its logo T-shirts. After revamping its women’s line, sales climbed 29% to $1.6 billion. “The single best thing the company has done is to try and diversify the portfolio so they’re not so dependent on men’s,” says Craig Johnson, president of retail consulting firm Customer Growth Partners. “If you look at where the growth in the denim market is, it’s very heavily on the women’s side.” According to NPD Group, sales of women’s jeans increased 9% in the twelve months ending July 2018, outpacing the 5% sales increase for the overall denim market.

Levi’s relaunched its women’s line in 2015 with a number of new styles and a four-way stretch fabric designed for comfort. Customers took notice. In 2016, Kylie Jenner posed on Instagram wearing a pair of Levi’s Wedgie Fit jeans. In 2017, Beyoncé wore a pair of its cutoff jean shorts during a performance at Coachella.

The relaunch was, in part, an attempt to address the rise of athleisure offerings from companies like Lululemon and Athleta that were eating into its business. “It drives me crazy that women wear yoga pants to nice restaurants—denim would look so much better. But they’re choosing athleisure because it’s more comfortable,” wrote CEO Chip Bergh in a 2018 essay for the Harvard Business Review.