Popular jeans maker, Levi Strauss & Co., has been reported to planning for initial public offering, IPO, that will see the privately-owned company raise between $600 million and $800 million.
Levi Strauss is now valued at $5 billion with its main business being jeans production and marketing on a global scale.
However, this is not the first time Levi Strauss will be going public. According to CNBC, Levi’s had gone public once before, in 1971, generating proceeds of about $50 million. At the time, it was one of the largest ever IPOs, even as the family maintained a large stake.
But while public, profits declined as did the company’s stock price. Descendants of Levi Strauss took the company private in a $1.7 billion leveraged buyout in 1984. They then did another buyout in 1996 that acquired stock from employees and outside investors, which consolidated ownership even more squarely in the hands of Strauss’ descendants.
In doing so, though, Levi’s took on billions of dollars in additional debt right at the time when the market was changing with the advent of the internet and e-commerce, and competition was growing.
After profit declines in recent years, Levi’s is seeing its top and bottom lines rise once again. on Oct. 9, Levi’s reported revenue of $1.4 billion for the quarter ended Aug. 26, a 10 percent increase from the same quarter a year ago. Net income was $130 million, representing a jump of 45 percent. During 2017, Levi’s posted revenue of nearly $5 billion. The company has also cut its debt load in half over the last two years, filings show.
The company is currently run by Chip Bergh, who has been chief executive officer and president since 2011. Before that role, he spent about three decades at Procter & Gamble.
While Levi’s has not commented on the news, the duo of Goldman Sachs and J.P. Morgan have been appointed to manage the deal.