Levi Strauss & Co. (LS&CO.) strives to provide the world's
casual workday wardrobe, inside and out. LS&CO., a
top manufacturer of brand-name clothing globally, sells jeans
and sportswear under the Levi's, Dockers, and Levi Strauss
Signature names in more than 110 countries. It also markets men's
and women's underwear and loungewear. Levi's jeans -- department
store staples -- were once the uniform of American youth, but
LS&CO. has been working to reconnect with the
niche and expand outside the US. It has transformed its
products portfolio to include wrinkle-free and stain-resistant
fabrics used in making some of its Levi's and Dockers slacks. The
Haas family (relatives of founder Levi Strauss) owns LS&CO.
While Levi's is marketed as an authentically American
brand, about 50% of the company's net revenues come from
outside the US. LS&CO. operates in mature markets in the
Americas, Europe, and the Asia/Pacific region. Sales in North
America, Japan, and Western Europe have suffered in recent
years for several reasons, including the downturn in the global
economy, demographic changes, and increased competition from trendy
lower-priced apparel offerings. For growth, the company is looking
to developing markets, including Brazil, China, India, and
Also, like many other apparel makers, which have traditionally
relied on department and specialty stores to distribute their
products, LS&CO. is developing its own retail network to
increase the availability and visibility of the Levi's brand.
Currently, it operates about 1,900 company-owned and franchised
stores and sells apparel online. Despite declining sales,
LS&CO. added more than 150 company-operated stores in fiscal
2009, primarily through acquisitions in the US and Europe.
Still, increased sales from its expanding retail network have
failed to make up for declines in the company's wholesale business.
Overall, net revenues fell 6.5% in fiscal 2009, during which time
profits also declined by about a third.
Part of the decline in sales is attributable
to growing competitive pressure. Through increased spending on
advertising and selling as well as its store expansion, LS&CO
hopes to regain some of the market share lost to rival VF
Corporation (maker of Lee and Wrangler brand jeans and apparel) and
others over the past decade. It has also been squeezed by
makers of pricey, premium denim (True Religion, Diesel
SpA) on the high end, and purveyors of trendy, low-priced
denim (Wal-Mart Stores and JCPenney) on the low
end. In response, the jeans maker created the
Signature by Levi Strauss brand for the mass market, but with
lackluster results to date. Sales of the company's
value-priced brand have been essentially flat in recent years
and accounted for just 5% in 2009.
Despite the increased competition, LS&CO.
has had to rely more heavily on its core Levi's label and less on
its other brands. Indeed, Levi's brand products accounted for 79%
of sales in 2009 while Dockers-branded products represented only
16%, gradually slipping from 21% in 2007. In an effort to
revitalize the Dockers brand, the company launched its "Wear the
Pants" global marketing campaign designed to emphasize the
masculinity of Dockers apparel. (Despite its appeal to men, Dockers
also offers a full line of khaki-inspired styles for women.)
Across all three brands, pants -- including jeans and other casual
and dress pants -- account for about 85% of sales, with men's
products generating about three-quarters of total net sales.
Licensing deals extend its reach into other niche markets. One such
deal with Delhi, India-based M&B Footwear, helped
LS&CO. launch a line of men's and women's casual shoes and
sneakers. Under a separate arrangement with Signature Apparel
Group, LS&CO. added Levi-brand underwear and loungewear to its
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