Billionaires



February 17, 2019,   9:22 AM

As Jeans Giant Levi Strauss Prepares To Go Public, New Billionaire Emerges

Will Yakowicz

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Levi Strauss & Co., one of the most storied brands in the U.S.--long-controlled by the Haas family, descendants of company founder Levi Strauss--filed paperwork to go public on the New York Stock Exchange on Wednesday.

Altogether six members of the Haas family, which ranks among one of America’s richest clans, own a combined 63% of Levi’s, according to an SEC filing from the 165-year-old company. The largest shareholder, Mimi L. Haas, has a nearly 17% stake that’s worth at least $1 billion, Forbesestimates.

Levi’s racked up 2018 revenues of nearly $5.6 billion, up 14% from the prior year. Based on those revenues and comparable companies in the apparel space, Forbes estimates that the company is worth about $6.4 billion, making the six Haas family member stakes together worth about $4 billion.  In 2015, Forbes valued the entire Haas family (excluding shares owned by their charitable foundations) at $3.7 billion.

In 2015, Forbes found that 44% of Levi Strauss was owned by more than 200 shareholders, most of whom were relatives. It’s likely that these disparate shareholders would be keen to have their wealth in more easily-tradable public stock. A spokesperson for Levi Strauss did not comment on why the company is planning to go public now. A spokesperson for the Haas family said the company is in a quiet period and cannot comment.

The company’s filing set a placeholder amount of $100 million to raise during the initial public offering. But a report from CNBC in November, citing sources close to the company, suggested Levi’s is looking to raise between $600 million to $800 million, at a $5 billion valuation. Levi’s is slated to go public during the first quarter of 2019, according to CNBC’s source.

In 1853, a Bavarian immigrant named Levi Strauss started a dry good wholesaling business in San Francisco, selling supplies to miners during the California Gold Rush. By 1873, Strauss invented the first pair of denim blue jeans, which held up well under the strain of gold mining and became the company’s signature product. Over 150 years later in 2018, the company had $5.6 billion in annual revenue. Its jeans are sold in over 50,000 stores around the world. Levi’s, with its iconic red label on the back pocket, have become a symbol synonymous with America.

Levi’s is also synonymous with entrepreneurship and family dynasty. Although founder Levi Strauss did not have any children of his own, he left the business to his four nephews and it was passed down over the generations. After World War II, brothers Peter Haas, Sr. and Walter Haas, Sr. took over Levi’s and are credited with turning it into an international brand. Mimi Haas, Peter Haas, Sr.’s widow, was a director at the company from 2014 to 2018. Peter Haas, Jr., Peter’s son and Mimi Haas’ stepson, started as a manager in 1972 and is now a director.

Mimi, Peter Jr., his sister Margaret E. Haas, and their cousin Robert D. Haas collectively own nearly 41%. Other relatives, including Daniel S. Haas, Jennifer C. Haas, own 12% of the company. The Peter E. Haas Jr. Family Fund, a charitable entity, owns 7.7%. Charles “Chip” Bergh has been the company’s CEO since 2011 and has the option to acquire 2.4% of the company’s stock.  

This will not be Levi’s first time on the Big Board. In 1971, the company went public, but the Haas family took it private in 1985.

John D Morris, senior brand apparel analyst at D.A. Davidson, says now is a good time for the jean maker to go public again. He says growth in athleisure wear is leveling off and consumers are looking to the old American standby, blue jeans.

“We are moving back into a favorable denim cycle…and that’s very good for Levi’s,” Morris says. “On this particular evolution of fashion trends, we are moving away from performance/athletic driven apparel and back towards denim.”

Morris is not the only analyst noticing a rise in denim sales. According to research by the NPD Group released in September, denim jeans sales grew by 5% in the year ending in July 2018 compared to the same period in 2017. NPD values the U.S. jean market at $16.4 billion.

Fashion trends are not the only bright spot for strong brands like Levi’s, Morris says. As department store sales drop and e-commerce sales increase, well-known brands are likely to see higher sales.

“We are also moving back into a brand driven cycle,” says Morris. “Levi’s is one of the most recognizable, if not the most recognizable, labels in denim. I think over the years, e-commerce and online driven trends have shifted …. and it’s all about the brand. When consumers think about outerwear, they aren’t going to Macy’s to shop, they’ll go online and think about their favorite [brand], or the most well-known brands.”



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