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Levi's Is Getting Closer to Going Public

Written by Monica Savaglia
Posted March 12, 2019

A few weeks ago, I wrote about the 166-year-old denim brand Levi Strauss and how it was planning to make its market debut (again).

Well, we’re getting closer to the company’s expected IPO date, so I wanted to update you on what we can expect from the company. As of right now, it has an expected IPO date of Thursday, March 21.

Levi's essentially invented blue jeans. It’s been a brand since 1853, and 20 years later the company invented its famous denim brand. Since then, it has become a significant staple in many generations' wardrobes.

Now, the company does a lot more than just blue jeans. It has evolved into a retail brand that offers quality products. It designs and markets products that include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and accessories for men, women, and children. Levi’s has become one of the world’s leading brands in apparel and retail. The company has $5.6 billion in net revenue and sales in more than 110 countries for the fiscal year 2018. Levi’s has a huge presence in the global retail market that keeps on growing.

As of January 30, 2019, Levi’s products were sold in over 50,000 retail locations, and it has 831 company-operated stores and 500 company-operated shop-in-shops. Levi’s has grown a brand that it is proud of and that is well known to consumers of many different demographics.

More Than Just a Denim Brand...

Levi’s focuses on delivering classic, authentic American style that’s effortlessly cool. The company has managed to make itself into more than just a retail store. It is a lifestyle brand that offers products that feel exclusive, personalized, and original to a variety of demographics. Whether they’re young or old, Levi’s is a brand consumers know they can trust for quality and original style.

Back in 2011, Levi's management team decided it needed to implement new revenue and profit growth strategies in order to stick around.

Those strategies are still in place today because Levi’s had a strong management team guiding the company, and it experienced positive results from those strategies. Net income has grown from $135 million in 2011 to $285 million in 2018, a CAGR of 11.3%.

Levi’s has put itself back in the center of culture through its new and increased marketing efforts. The company realized it was important to establish a connection with its consumers again. So far, the company has been successful in doing so.

In 2014, it launched a global brand campaign called “Live in Levi’s,” which showed many of its consumers’ memorable moments take place while wearing their favorite pair of Levi’s. In 2017, its ongoing campaign called “Circles” had one of the top 10 most-watched ads on YouTube.

According to the National Retail Federation (NRF), 2019 is predicted to represent the 10th consecutive year of retail growth. 2018 saw retail sales increase 4.6% to $3.68 trillion, and online sales were up 10.4% from last year. This paves the way for strong growth for a retail company like Levi’s. NRF’s president and CEO Matthew Shay said, “More people are working, they’re making more money, their taxes are lower, and their confidence remains high.”

Levi’s hasn’t restricted itself to only selling its products in department stores. I mentioned earlier that it has 831 company-operated stores and 500 company-operated shop-in-shops. Being more accessible to consumers and defining itself as a brand to trust is going to lead Levi's to significant revenue growth for the future.

And for these reasons, Levi’s believes it is the right moment to go public. Its brand is recognizable and desirable, which could be seen as a great long-term investment for potential investors. The company has a strong global operating infrastructure and a strong management team leading it in the direction it needs to go to grow profits and have a great impact on the global retail market.

What to Expect from Levi’s Upcoming IPO

Levi’s has an expected IPO date of Thursday, March 21. It’s offering 36.7 million shares that will be priced between $14 and $16 per share. The company aims to raise around $580 million at the high end.

Levi’s joins the list of high-profile and highly anticipated companies that are planning on IPO-ing this year, including Lyft, Uber, Pinterest, Airbnb, and Slack, just to name a few. Levi’s brand is recognized all over the world, so its underwriters shouldn’t have any problem marketing its IPO to investors.

According to its S-1 filing, Levi’s plans to use its IPO proceeds for general corporate purposes, including working capital, operating expenses, and capital expenditures, in addition to using a portion of the net proceeds from its offering for acquisitions or other strategic investments.

Earlier, I talked about how the company is growing and plans to continue that growth. Well, there’s no better way to expand a business than by acquiring businesses that will allow for more revenue streams.

The underwriting team that’s handling Levi’s IPO consists of 12 members including Goldman Sachs, JP Morgan, and Morgan Stanley. Levi’s will trade on the New York Stock Exchange (NYSE) under the symbol “LEVI.”

A lot of generations have grown up with Levi’s. I’m sure you've owned a pair of its jeans at some point of your life, if not now. It’s long been a trusted brand, and in the past few years, the company has made a complete turnaround to become more than just a denim company.

Now, the company is making money and paying off its debt so it can continue being profitable and growing into a brand that will be here for another century... or more.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

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