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Sunday, November 25, 2018

Urban Fashion Spurs Levi's Upcoming IPO

Kris Kross during 1993 Kid's Choice Awards in Los Angeles, California, United States. (Photo by Jeff Kravitz/FilmMagic, Inc)Getty

Levi’s is considering returning to the stock market more than 30 years after it went private. The company is reportedly planning and IPO that values it at up to $5 billion sources told CNBC, despite many stores closing that sell Levi’s brands. As culture changes and sub-cultures spring up, is now the right time for Levi’s to become a publicly traded company once again?

The Breakdown You Need to Know

Hip-hop's love affair with jeans is as diverse and varied as the genre itself.  Straight legged denim, like Levi’s classic 501 or 505 jeans, kept your favorite old school rappers looking fresh back in the '80s . While current lyricists look to a more tailored approach from Levi’s, like its skinny jeans to keep their wardrobe fresh.

CultureBanx noted the denim maker has been around the block a time or two, they first went public in 1971, before family members took it back private in 1984 through a leveraged buyout. Levi's is looking to raise between $600 million and $800 million for its new IPO and investors seem to think that’s a fair price. Since Levi's bonds are publicly traded, which means it has to report quarterly earnings to the SEC, during the first nine months of the year revenue has gone up 16%. Net income jumped 44%, mainly due to demand for its jeans at both retail stores and online.

Long before today's slim cuts or the baggy jeans of the 90s, Run DMC and Big Daddy Kane were rocking straight-legged jeans. In 2013, Jermaine Dupri paid homage to the memory of Kriss Kross member Mac Daddy by wearing his Levi's backwards to the funeral, a style popularized by the group. Present day rappers have moved beyond just sporting the company’s jeans and are mixing Levi's Trucker Jackets with other brands, as a way of taking a menswear staple and re-contextualizing it.

Denim’s Ripped Path

Blue jean styles have been largely stagnant over the past decade, with the skinny version remaining the dominant player. Last year, imports of elastic knit pants surpassed those of jeans for the first time ever, according to the U.S. Census Bureau.

Levi’s had struggled for years to stave off pressure from stretchy pants and thanks to a significant revamp of its women’s jeans, the company has been turning out a solid profit. They also found ways to fend off more comfortable styles such as leggings and yoga wear.

This wardrobe staple can be a major sales driver for many brands but perhaps Levi’s has benefitted the most with its imminent IPO. Nordstrom tried and failed last year to go private and shares have been unable to stabilize, down nearly 15% in the past two years. Levi’s is planning to go public during the the first quarter of 2019.



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