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Levi Strauss IPO may be among biggest consumer offerings in a decade

  • Levi Strauss will offer shares to the public on Thursday, priced at $14 to $16 each
  • That could give it a valuation of $5.8 billion, making it one of the biggest consumer-product IPOs in a decade
  • The jeans maker is bucking a trend of retailers and apparel makers going private or splitting themselves up

Unlike other coming IPOs such as Lyft, Uber and Slack, Levi Strauss & Co. isn't exactly a startup. Named for the man who helped patent denim jeans in 1873, Levi Strauss plans to rejoin the public-market fray on Thursday, more than 30 years after going private. 

The jeans maker is looking for a valuation of $5.8 billion in offering shares at $14 to $16 a piece, which would represent one of the biggest retail and consumer-products IPOs of the last decade. The public offering is expected to raise $675 million, a figure that would make it the year's largest U.S. listing to date, according to Arthur Hogan, chief market strategist at National Securities Corp. 

While the IPO market has heated up for large technology startups, relatively few retailers have opted to go public in recent years, which have been difficult for the sector at large. As Amazon changes the rules for brick-and-mortar chains, some longstanding brands instead looked to go private, as Levi Strauss did in 1985. An effort by another family-run business, Nordstrom, to take the department-store chain private derailed over pricing a year ago.

A shakeup in jeans

In addition to Levi Strauss, other denim makers are also shaking up their business plans. That's a result of more consumers shopping online and as tastes have shifted from jeans to "athleisure" brands more suitable for yoga than farm work.

VF Corp. plans to spin off its Wrangler, Lee and Rock & Republic brands into a new public entity for its jeanswear business called Kontoor Brands in coming months. It will keep The North Face and Timberland brands under the parent company. Another competitor, Gap, last month said it would split into two publicly traded companies: Old Navy and a yet-to-be-named company, in a process expected to take place next year. 

Still, the more than 165-year-old Levi Strauss has three things in particular going for it, in Hogan's view. "Investors are hungry for a new, well-run consumer apparel company to invest in that isn't Nike. There's a sense that athleisure is fading and there's a shift back to denim. The use of expensive apparel to express who you are isn't relevant to the key consumer demographic, 15- to 30-year-olds," Hogan said.

Ticker symbol: LEVI

In its prospectus, Levi Strauss said it's targeting "value-conscious consumers" and would further expand its business through existing relationships with Walmart and Target. It will trade under the ticker symbol LEVI on the New York Stock Exchange.

Levi Strauss reported net revenue grew to $5.6 billion in 2018 from $4.8 billion in 2011, with net income rising to $285 million from $135 million during the seven-year period, according to its regulatory filing. The company sells in 110 nations at more than 50,000 retail locations, with the U.S. its biggest market.