levi strauss ipo public wall street

Chip Bergh likes to say that Levi Strauss & Co. performs best when it’s at the “center of culture.”

Now the chief executive officer is trying to put the 166-year-old denim maker back at the center of Wall Street with an initial public offering  — the company’s second.

Culture and finance are two extremely different spheres — but certainly being a little zeitgeist-y doesn’t hurt when you’re trying to raise cash. It also helps to already be making tons of money. And Bergh has managed to position the company — which he has described to WWD as the “original Silicon Valley start-up” — to win in both areas.

During the ceo’s eight-year run so far, Levi Strauss has boosted marketing, expanded overseas and in women’s and tops, opened stores, collaborated with Supreme and Google, opposed President Donald Trump’s aborted ban on people from Muslim countries and found itself on the receiving end of a “Saturday Night Live” sendup (with Ryan Gosling sporting Levi’s “Wokes,” gender non-conforming and “style-neutral” jeans).

All of that is in keeping with Levi Strauss’ long history of managing to be at the right place at the right time, having invented blue jeans in the 1870s and become a touchstone for everyone from gold miners and greasers to hippies and the tech set, all the while growing into a big business.

For the first time in 34 years, outside equity investors will get a chance to bet the iconic brand can keep it all going.

The stock market has been shaky lately and IPOs ground to a halt as federal officials stayed home for the government shutdown in January. Now the machinery seems to be starting back up.

Levi Strauss’ IPO might very well be an anomaly in a year that is expected to be dominated by tech offerings — from Revolve in e-commerce to Pinterest to Uber, Lyft to Slack. The denim brand’s IPO also will be unique in another way: It will be one of the few apparel brands to come to the stock market in years; most fashion-related offerings in recent years have been digital players (from Stitch Fix to Farfetch) as much as fashion companies. If Levi Strauss does pull off an offering, it will join Canada Goose Holdings and Michael Kors Holdings (now Capri Holdings) as part of the small group of brands to go public this decade.

Once the denim maker goes public, it will also have some newly refashioned blue jean competition for investors. Lee and Wrangler are already publicly held, but VF Corp. plans to spin off the brands this year in a tax-free transaction that will see them independently listed under the name Kontoor this spring.

Levi Strauss is looking to post its stock under the ticker symbol “LEVI,” according to its registration statement filed Wednesday with the Securities and Exchange Commission.

As is often the case, the regulatory filing goes into the company’s operations and outlook in depth, but is short on many vital details, including how many shares are expected to be sold to the public. The paperwork does note that Levi Strauss plans raise $100 million in the offering, but that figure is typically used as a placeholder. The real amount raised depends on market demand.

Ultimately, the funds raised from outside shareholders will go to general corporate purposes, including possible acquisitions. The Haas family will continue to control the company after the offering through Class B shares, a risk to other shareholders that the statement lays out.

“Descendants of the family of Levi Strauss have the ability to control the outcome of matters submitted for stockholder approval, which will limit your ability to influence corporate matters,” the company officially warned.

Mimi Haas is listed as the company’s largest shareholder, with 62.9 million Class B shares, or 16.9 percent of the company. And the members of the Haas family who are listed as holding at least 5 percent of Levi Strauss, including Mimi, collectively own a 58.7 percent stake. (Bergh, who is not a family member, owns 9.3 million shares for a 2.4 percent stake). Class B shares have 10 times the voting rights than the Class A shares that will be offered to the investing masses.

Levi Strauss has been in the public market spotlight before.

The company went public in 1971 only to be taken private again in 1985. More recently, the group has been enjoying a resurgence.

Last year Levi Strauss drove revenues up 14 percent to $5.6 billion while earnings were flat at $285 million, but included a one-time $143 million charge related to tax changes. While privately held, Levi’s has public debt compelling it to report its results to the SEC.

“Our mission is to be, and be seen as, the world’s best apparel company and one of the best-performing companies in any industry,” the company said in its registration statement. “We are an iconic American company with a rich history of profitable growth, quality, innovation and corporate citizenship.”

While that sounds like something any number of fashion companies might say, Levi Strauss is one of the few names that can back up the assertions — although the rise to its current strength has seen plenty of ups and downs.

For many years, the company seemed caught in a boom-and-bust cycle that would see it thrive and then retreat as jeans fell in and out of favor. The brand added a lower price tier in the Aughts, launching Signature by Levi Strauss & Co., sold at Walmart, but it continued to struggle with its hefty debt load following the buyout. (The lower-priced business was later expanded with the brand Denizen, sold at Target).

chip bergh levi strauss second quarter earnings sales

Chip Bergh  jonah koch

Under Bergh, a Procter & Gamble veteran, the company has pushed further into women’s (now 29 percent of revenues) and tops (20 percent). The business also branched out internationally: While 55 percent of the Levi Strauss business remains in the Americas, 29 percent of sales come from Europe and 16 percent from Asia.

Since 2011, the company’s revenues have grown by $800 million and net income has increased at a compound annual growth rate of 11.3 percent. Debt was cut nearly in half, to $1.05 billion from $1.97 billion.

The company’s brands, including Dockers, are sold in a total of over 50,000 doors, including roughly 3,000 brand-dedicated stores and shop-in-shops. The firm operates 824 stores directly as well as 500 shop-in-shops.

Direct-to-consumer sales represent about 35 percent of the company’s business, up from 29 percent in 2015. The company added 74 stores last year, including its largest door, a nearly 17,000-square-foot Times Square outpost.

While in the midst of a growth spurt, Bergh has been careful to keep pushing the business to change. For instance, last year, he reorganized the c-suite, consolidating product development and the supply chain under Liz O’Neill. The digital and brick-and-mortar businesses were put under Marc Rosen.

“When you’re having a string of successes like we’ve been having now for almost two years, the biggest risk is complacency,” Bergh said in October. “And probably one of the best indicators of complacency is to try to protect the status quo. I wanted to use the opportunity of the momentum that we’ve had to make some structural changes.”

Clearly more changes are coming Levi Strauss’ way.

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