Levi's, a brand that has had its ups and downs!

This article is from Management magazine

A 167-year-old lady slipped last year among the new companies introduced on Wall Street: Levi Strauss. And managed to grab more than 620 million dollars, beyond his expectations. After thirty-four years of absence from the New York Stock Exchange, the brand created by a cloth merchant to dress gold diggers and loggers in California signed a spectacular return to business. But the turn of the 2000s was almost fatal to him. Caught between very low-cost jeans and brands that bet on luxury jeans, the historic Levi's is also outdated by cargo pants for the adventurous side and by jogging pants. Result: sales are halved in five years!

Around the 2000s, jeans were no longer successful. Levi's, which has built all of its success on this robust and rather masculine product, finds itself competing with fast fashion (cheap denims) and very high-end creations. Worse: young people now prefer joggers and yoga pants. The mark begins to dive.

Chip Bergh, the shock CEO who arrived in 2011, put everything back on track: he decided to expand the collections for women, to dare to use new materials and new cuts. He also wants to rejuvenate the brand by reaching out to millennials on social networks. Finally, it is reviewing marketing by regaining control of the distribution channels.

A change of CEO, and it starts again...

The upturn, which occurred in the summer of 2018, materialized with the launch of Batwing (“bat wing” in English). It's not a pair of jeans, it's a t-shirt. Crossed out with the brand's red logo, it is a real hit around the world thanks to an intense social media campaign that reconciles millennials with Levi's. Behind the scenes, this success is signed Chip Bergh. Recruited at Procter & Gamble, where he was in charge of men's hygiene, this former army officer with a still martial look took over the group in 2011 and immediately instituted shock treatment.

After replacing three-quarters of the managers, Chip Bergh defines a simple strategy: Levi's must become a lifestyle brand, that is to say, which dresses from head to toe… and not just men. "Jackets, tops, accessories: a whole dressing room can be signed Levi's, explains Diana Dimitian, who heads the Southern Europe zone from Paris. It makes sense to extend the range: we keep our male clientele, but we can also seduce women, who buy more often and more than men." In line with this commercial policy, the brand even launched a handbag last fall.

Justin Timberlake put to work

Meanwhile, Levi's had to adapt to new silhouettes and work with new materials. In 2013, Bergh repatriated to San Francisco its designers and engineers previously based in Turkey, near the production sites. In the Eureka Innovation Lab, they test components, develop prototypes, introduce, for example, Stretch in a collection of jeans called Lot 700 – a small revolution! Their latest baby, the Ribcage jeans, is designed especially for women. "Previously, we used only four manufacturing methods for jeans, underlines Diana Dimitian. Today, we use more than a thousand." In fact, the women's segment has found its place in the range, since it now provides 29% of total sales, or 1.6 billion dollars, against 10% before the arrival of the new CEO.

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But young people are also courted. To conquer them, Levi's offers the ephemeral competition of their idols, like Justin Timberlake last year for a limited series, or iconic brands like the streetwear brand Supreme. Even more emblematic is the launch of an Air Jordan shoe with Nike. "Levi's has achieved a tour de force there, considers Martin Crépy, partner at Simon-Kucher & Partners: repositioning an ordinary product, jeans, so that it becomes a fashion product. By partnering with Nike, it has clearly reinforced its community and enhanced its product through personalization." Which is the key word for anyone who wants to attract young people.

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In Paris, in the store on the Champs-Elysées, the Levi's fan can choose his cut of jeans at the Taylor Shop, make tears (or not), add patches, paint, studs... And, at the Print Bar, he can personalize his T-shirt. This concept of point of sale also emanates from Chip Bergh, who clearly understood that mastering the distribution network was the second essential leg in the conversion of the brand. "Levi's has favored a policy of opening up to its own brand while reducing its presence in multi-brand stores", explains Martin Crépy. In three years, between 2015 and 2018, the company opened no less than 258 stores in Europe… and is currently testing stores intended exclusively for women. The next step ? A real development of sales on… the Web. A shame for the king of denim!