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U.S. Business Levi Strauss files for New York IPO after 35-year absence from public markets

The label of a Levi's denim jacket is photographed at a store in Frankfurt, Germany, on March 20, 2016.

Kai Pfaffenbach/Reuters

Jeans maker Levi Strauss & Co. on Wednesday filed documents to list itself on the New York Stock Exchange, seeking to return to public markets after more than three decades.

Levi’s, one of the world’s biggest denim brands and the inventor of blue jeans, faces rapid changes in consumer tastes as people shop for cheaper store brands and athleisure apparel.

Last year, rival VF Corp said it would spin off its less profitable Wrangler and Lee jeans business into a publicly traded company, allowing it to focus on Vans and its outdoor wear businesses to help improve profit margins.

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The 145-year-old company, which intends to list as “LEVI,” set a placeholder amount of US$100-million to indicate the size of the IPO. The final size of the IPO could be different.

The San Francisco, California-based company could be valued at about US$5-billion when it debuts, a CNBC report said in November.

Levi’s is controlled by the descendants of founder Levi Strauss. It is required to post quarterly earnings with U.S. regulators as it its Japanese arm, Levi Strauss K.K, is publicly traded in Tokyo.

In its latest report, the U.S. apparel company said sales rose nearly 9 per cent to US$1.59-billion. Its filings also show that it has halved its debt load over the past two years.

Levi’s sells its products in more than 50,000 retail locations, including about 3,000 stand-alone stores and shops-in-shops across 110 countries. It sells apparel under the Levi’s, Dockers and Denizen brands.

Jane Hali, head of investment research firm Jane Hali & Associates, said she thinks it is a good time for Levi’s to go public, as jeans – particularly fashion jeans – seem to be resonating with consumers.

Multibrand specialty retailer American Eagle Outfitters Inc., for instance, has invested heavily in refreshing its jeans collection and has grown its total U.S. jeans market share to 7 per cent, second only to Walmart Inc. at 10 per cent, according to a Cowen and Company research note published Jan. 15.

U.S. teen apparel retailer Abercrombie & Fitch has also noted a growing demand for fashion denim.

“Denim is doing much better than it has in the past and Levi’s has the ability to be mass market,” Ms. Hali said, adding that Levi’s will make its stock market comeback with a strong, diversified portfolio under its belt.

With Levi’s IPO filing, the company joins a list of high-profile companies seeking to go public this year including ride-hailing companies Uber Technologies and Lyft, photo-posting app firm Pinterest and home-renting company Airbnb.

Goldman Sachs, JPMorgan Chase & Co., Bank of America Merrill Lynch and Morgan Stanley are part of a 12-member underwriting team handling the IPO.

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