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Levi: Too big for it's trousers?

Written by Nik Rainer | 5 minutes
THU 21-03-2019
Investors will soon get a famous and appealing share now that American icon Levi Strauss & Co., better known as Levi's, has announced it will soon make the move to the stock market.

Various financial media report this. The 165 year old jeans manufacturer wants to literally put on bigger pants in the coming years and is therefore looking for new capital.

The aim is to raise around $ 100 million at the IPO. Analysts think that the company, which will be traded under the ticker code "LEVI", will soon be worth around 3 billion dollars.

PANTS
Although the company was still able to grow in recent years, the jeans sector in the United States clearly had to tighten its belt: jeans sales fell by more than 10 percent over the past five years. That is precisely why Levis sees opportunities for growth in new markets and new products.

The jeans maker, who sells one in eight jeans in the United States, also wants to become less dependent on the old denim and grow with, among other things, shoes, shirts, winter and women's clothing.

Levi's also wants to become much stronger in new growth markets, including China, Brazil and India. For example, China, which now accounts for 20 percent of global clothing sales, is only responsible for 3 percent of Levi's sales. In total, the group realized a profit of 285 million dollars last year on a turnover of 5.6 billion dollars.

In addition to sales in the nearly 1,000 own stores, the company wants to grow more shop-in-shops and, above all, also through online sales. However, competition, especially online, is fierce.

BLUE CHIP
Whether the denim icon at the fair will also grow into a true blue chip will have to be proven. An IPO is not entirely new for the company. The jeans maker was already listed in 1971, but fourteen years later the company was taken off the stock exchange by investors. In 2003 the company even went under, but eight years ago a successful turnaround was made.

Even now, the relatives of founder Levi Strauss still have a controlling interest in the company and - although details of the IPO are not yet known - this is likely to remain so even after the coming IPO.

I

Author

Nik Rainer

Nik joined BinckBank in 2016 as part of the team responsible for rolling out the Saxo Bank international service. Nik has held positions at various banking institutions such as Hambros Merchant Bank, Standard Chartered Bank and Morgan Stanley and brings his solid financial background to the role. Working with the development of new client services and relationship management, Nik also contributes to local publications and forums.

The information in this article should not be interpreted as individual investment advice.  Although BinckBank compiles and maintains these pages from reliable sources, BinckBank cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk.  We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks. 

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