There’s a new, yet very old kid, on the trading block.
Levi Strauss & Co, the 166-year-old jeans maker from San Francisco, said late Wednesday that shares in its initial public offering were priced at $17, above the $14 to $16 range the company had estimated in its updated prospectus last week.
That gave Levi’s a $6.6 billion valuation as it prepares to return to the stock market on Thursday morning for its first day of trading since 1985. Levi Strauss, which invented its iconic blue jeans in 1873 with the use of rivets that strengthened the seams in denim work pants, was publicly traded from 1971 until 1984, when it was taken private. The shares will be listed on the New York Stock Exchange, which for the first time in its history is lifting its ban on blue jeans on the trading floor in honor of the IPO, with the ticker “LEVI.”
The hot IPO is counterintuitive for a retail and apparel company given the travails companies in those sectors have faced in recent years. But under CEO Chip Bergh, Levi’s has staged a remarkable comeback. Only a few years ago, Levi’s was handcuffed by a heavy debt load and struggling to find a niche for itself in the competitive denim market and the booming athleisure market dominated by the likes of Lululemon Athletica. (LULU). And it had grown overly reliant on declining department stores.
But since 2011, when Bergh took the reins, Levi’s has cut its debt by half, and found enormous success with tops like t-shirts, sweaters and jackets, products that had long taken a back seat to its jeans. And the company has pushed its international expansion. In 2018, revenue came in at $5.58 billion in 2018, up 14% from a year earlier. That is still below its 1997 peak of $7.1 billion but nonetheless a big jump over it sales levels at the start of this decade.