Levi Strauss & Co, the company which invented the concept of blue jeans, is still weathering the chill winds of changing fashion. During the 1980s, Levi's turned streetwear into a fashion statement, and by the mid-1990s, the company was chalking up sales of over $7bn. But when change came, it came fast. A move away from denim by core consumers, coupled with a huge increase in the number of rival manufacturers at all price points severely dented performance. Within two years, market share had halved, and profits plunged from over $1bn in 1997 to net losses in 2003. Sales hit an all-time low in 2009 of just $4bn. Performance has improved steadily since then, but Levi Strauss is still under pressure, hampered by its dependence on just one comparatively narrow market segment. Pants of one sort or another still account for almost two-thirds of annual sales and there are few other fashion companies in the mid-market who don't produce their own competitive denim products. Revenues for the year to Nov 2019 hit a 20-year high of $5.8bn (though still well below 1996's $7.1bn). Net income was $395m. However, the Covid pandemic, and the widespread closure of clothing shops worldwide, had a significant impact on performance in 2020. Revenues for the ye 2020 plunged to under $4.5bn - a five-year low - and the company reported a net loss of $127m. Despite its global footprint, Levi's still generates half its revenues in the US. The main Levi's brand - tops as well as bottoms - contributed 87% of total sales in 2020, or $3.9bn (from over $5bn the year before). Value brands Signature by Levi's and Denizen by Levi's added a further 8%. The biggest victim of the changing market in recent years has been the group's chinos brand Dockers, whose sales have steadily shrunk, falling to just $250m in 2020 (from over $900m in 2007). The group operates comparatively few major sponsorship partnerships, but has naming rights over the new home of the San Francisco 49ers football team, the Levi's Stadium, which opened in 2014. Members of the Haas family - descendants of founder Levi Strauss - own approximately 59% of the company's shares, with most of the rest distributed between family members' charitable foundations and senior executives. Non-family member Chip Bergh is CEO.
Capsule checked 9th March 2020
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Who are the competitors of Levi Strauss? The jeans and casual apparel market is crowded to say the least. Levi Strauss' main traditional rival in branded denim manufacturing is what is now Kontoor Brands, owner of Wrangler and Lee Jeans. Regional rivals in the mass-market sector include G−Star in the Netherlands, Brax in Germany, Pepe in Spain and Edwin in Japan. In the premium segment Levi's competes with high fashion brands like Diesel and Lucky, as well as designer jeans from Ralph Lauren, Calvin Klein, Tommy Hilfiger and others. In addition the group faces competition from vertically integrated specialty retailers, such as Gap Inc, Abercrombie & Fitch, American Eagle, J Crew, Eddie Bauer, as well as Zara, Hennes & Mauritz, Next and Celio in Europe; and from private or exclusive labels, such as Wal-Mart's Faded Glory brand, Target's Mossimo and Merona, JC Penney's Arizona, Macy's INC and Sears' Canyon River Blues, Canyon River Khakis and Land's End. If that were not enough, the group also competes within the wider casualwear market with manufacturers such as Haggar as well as sportswear manufacturers led by Nike and Adidas. See Clothing & Fashion Companies for other companies
Historical profile information for Levi Strauss & Co
Adbrands Daily Update 25th Sep 2019: "The Suit". These days, the traditional business suit faces the same existential threat as the wet razor; it's lost its place to casual style: slacks (and a beard). The protagonist in this entertaining film from Santa Marta & Astorga for Levi's Dockers brand has both. But the suit isn't going to give up without a fight... It's an adorably silly idea, but executed with style and wit. "No suit was injured in the making of this film"! Presumably it was all suit doubles.
Adbrands Daily Update 14th Feb 2019: In the wake of another solid set of financial results, Levi Strauss announced plans for a public offering of part of its equity. Descendants of the founding family took the company private three decades ago. After a prolonged slump in the late 1990s and early 2000s, the group has enjoyed a slow but steady turnaround since 2010. Revenues for the year to Nov 2018 hit a 20-year high of $5.6bn - it was also the first time for a decade that sales have been above $5bn - and operating income too hit multi-year highs. Net income was only modestly higher as a result of a large tax write-off. The group is said to be planning to raise between $600m and $800m to "drive further brand and category diversification". The vast majority of revenues comes from the main Levi's brand or lower-priced variants Denizen by Levi's or Signature by Levi's. Sales of Dockers khaki pants - currently its only other brand - have been in steady decline for years, now accounting for only 7% of revenues.
Adbrands Weekly Update 27th Sep 2018: Ads of the Week "Use Your Vote". Levi's is one of several companies urging all Americans to take advantage of their right to vote in the mid-term elections, with an upbeat film from FCB West. It hardly needs to be said which side Levi's will most probably be voting for; the ad makes it quite plain from the mix of voters depicted. We can only hope the message gets through this time: a similar upswell of liberally-aligned ads two years ago failed to connect with sufficient impact.
Adbrands Weekly Update 24th Aug 2017: Ads of the Week: "Circles". These days it's probably impossible for any ad to reach the iconic status of some of BBH's classic work for Levi's from the 1980s and 90s, and that once-mighty brand has wrestled with plenty of challenges of its own since then. But current agency FCB's work for Levi's still achieves flashes of sheer brilliance. The ads don't come along very often but they're always worth a look when they do appear, like this lovely new film which manages to celebrate not just denim, but also the joy of dance and the many facets of our multicultural world. Time to get up and get down!
Adbrands Weekly Update 13th Jul 2017: There was encouraging progress at Levi Strauss, one of the first companies to report 2Q results this quarters. Strongest growth came from women's bottoms - as they call the female jeans segment. This is traditionally one of the company's weaker segments, but it has expanded dramatically over the past two years, This was its 8th consecutive quarter of growth, rising by an impressive 24% to over a $1bn a year for Levi's. Tops did even better with a 39% lift, taking pressure off the traditional hard core of the business in men's jeans and casual pants. Total revenues rose almost 6% to $1.1bn, though net income slipped back as a result of a one-off charge for early extinguishment of some of the company's debt.
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