The company that invented the jeans goes back to the place it left three decades ago. Levi Strauss quotes again on Wall Street After completing an offer that raises 623 million dollars and gives an initial valuation of 6.550 million. To celebrate the first market release in four months, relaxed dress standards to be able to wear jeans on the floor. Their actions were appreciated at the first change of hands by 30% on the starting price.
Levi's was founded in San Francisco in 1853. Two decades later, the product that made it globally recognized and that became an icon of modern culture. Now stars in the second public offering of its history on the New York Stock Exchange, under the LEV symbolI. The starting price was set the afternoon of Wednesday at 17 dollars the title, above the band of 14 to 16 dollars that was indicated days ago. The demand was very high in the hours before the re-release.
The founding family will take most of what is collected. The rest of the money, about 160 million, will go towards strategic investments, such as financing acquisitions, and covering operating expenses. Along with its iconic jeans, Levi's owns the Dockers and Denizen brands. Last year it had revenues of 5,600 million, after growing by 14%. 55% of sales are generated in the United States. Europe is its second largest market, with 29%.
This business figure contributed a profit of 285 million, which remains more or less stable compared to previous years because it increased in parallel the spending that is being allocated to advertising campaigns. Levi's seeks to grow essentially in two ways. On the one hand, increasing its presence in emerging countries such as China or Brazil. On the other, redefining the distribution channels of their clothing and promoting electronic commerce.
Levi's debuted for the first time in 1971. Its owners took it out in 1985, when sales began to decline. That operation was valued at 1,700 million. The moment it returns to the market is not very favorable, because it coincides with a drop in retail sales in the US, the uncertainty of commercial litigation with China, new consumer trends and the impact of electronic commerce in Macy's department store JCPenny.
Charles Bergh, his current CEO, believes, however, that he can take advantage of the icon's image and thus evolve the brand to reach a younger audience without abandoning his followers. This implies that he will continue to invest the next two years in campaigns to be present at sporting events, music festivals and presenting collections with celebrities while testing other product categories.
For the shareholders, the company follows a capital structure similar to the big technology. This allows the heirs of Levi Strauss to control strategic decisions. In practice, the small investor will have very limited ability to influence the direction of the corporation in front of the Hass family. Levi's answers that in this way he seeks to have more flexibility to make the decisions to grow.
Levi's is already the largest seller of denim garments in the world, ahead of Zara, H & M and Wrangler. The placement comes after four months of drought in stock market premieres, which also explains the strong demand for their shares. It's just the beginning, because there are 230 companies knocking on the door of Wall Street. Levi's offer will continue next week Lyft, rival of Uber, which will do so in May. WeWork and Pinterest are also expected.