Levi Strauss & Co. made it official, filing paperwork Wednesday for an initial public offering under the ticker “LEVI.”
Financial sources started buzzing in November that the company, controlled by the Haas family, was preparing an offering.
The IPO is being led by Goldman Sachs & Co. LLC and J.P. Morgan Securities, with help from BofA Merrill Lynch, Morgan Stanley & Co. and Evercore Group.
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, descended from founder Levi Strauss, will continue to control the firm after the offering, 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 said.
Levi Strauss has been here before.
The company went public in 1971 only to be taken private again and find itself saddled with debt. But more recently, it has been enjoying a resurgence under the leadership of Chip Bergh, chief executive officer.
Last year, the company drove revenues up 14 percent to $5.6 billion while earnings were flat at $285 million, but included a onetime $143 million charge related to tax changes. While privately held, Levi’s has public debt compelling it to report its results to the Securities and Exchange Commission.
“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’s 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.
Founded as a San Francisco wholesale drygoods business in 1853, the company invented blue jeans in the 1870s, making the Levi’s brand a touchstone for everyone from gold miners and greasers to hippies to the Silicon Valley tech set.
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., but it continued to struggle with its hefty debtload, a leftover from the buyout.
Bergh, a veteran of Procter & Gamble, joined the company in 2011 and has led its recent resurgence, expanding into other categories, including 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.
During Bergh’s tenure, the company’s revenues have grown by $800 million and net income has grown at a compound annual growth rate of 11.3 percent. Debt was also 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 told WWD 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.”