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Jeans maker Levi Strauss plans NYSE initial public offering – Financial Times

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Levi Strauss has fired the starting gun on its US stock market comeback, hoping investors will put a price tag of about $5bn on the inventor of blue jeans despite a competitive market for clothing.

The San Francisco-based company laid down plans on Wednesday to list on the New York Stock Exchange with the ticker LEVI, returning to the public market 34 years after it was taken private.

The group, which joins other companies including Uber, Lyft and Airbnb in targeting an initial public offering this year, did not confirm how much it would raise. People with knowledge of the IPO previously said it planned to tap investors for between $600m and $800m, valuing it at more than $5bn.

Proceeds would be used to increase “financial flexibility for general corporate purposes, including working capital, operating expenses and capital expenditures”, the company said.

Levi is planning the IPO at a time when the rise of online shopping and changing customer tastes are upending retail. Consumers are buying more sporty clothing, a trend known as “athleisure”.

In a filing with the Securities and Exchange Commission, Levi sought to persuade Wall Street it could succeed in the shifting landscape — highlighting its push into “omni-channel” retail, combining a physical and online presence.

“While ecommerce still comprises a small portion of our net revenues, it has been our fastest growing business over the last several years,” the company said in its filing. Wholesale channels generated almost two thirds of net revenues last year.

In stores, Levi has introduced ways for customers to tailor their own jeans. Other initiatives include new styles, such as tapered fits in men’s jeans, tie-ups with celebrities such as the singer Justin Timberlake, and a push into categories such as tops and women’s clothing.

The company, whose products are sold in more than 50,000 outlets, recently opened a 17,000 sq ft store in New York’s Times Square.

Descendants of Levi Strauss, the German immigrant who founded the company, retain control through Class B stock. They took it private in 1985 after a previous listing in 1971.

Thursday, 29 November, 2018

The group has been expanding outside the US. Europe and Asia now account for about 29 and 16 per cent of sales, respectively. It is targeting expansion in China, India and Brazil and other emerging markets. Hinting at strains on global supply chains, the group said no single country accounted for more than a fifth of its sourcing.

Total debt stood at $1.05bn at the end of November, although the company said it had already almost halved the size of the burden since 2011.

Accounts showed the company generated $5.6bn in revenues in the year to November, up 14 per cent from a year ago. Net income rose to $283.1m, up from $281.4m the previous year.

Bankers at JPMorgan Chase and Goldman Sachs are leading the IPO.

The plans put pressure on shares in other clothing companies. Shares in Gap, American Eagle Outfitters and Urban Outfitters were all down at least 2 per cent by early afternoon in New York.