Levi Strauss reorganizes U.S. division

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Levi Strauss & Co. is taking a major step to refashion itself by organizing into a brand management-style system.

In doing so, the jeansmaker shuffled five executives in its Americas division and eliminated two executive posts. Other shifts are slated for the near future, with the reorganization to be complete during the first quarter of 1999.

"We are using a model that will combine the best practices from package goods and other apparel companies, and we're combining those with what we know works at Levi Strauss & Co.," said a company spokesman.

Levi's management structure has been built around functions such as merchandising, sales and operations.

The restructuring around consumer segments is the marketer's second management shift since April, when John Ermatinger became president-Americas, from VP-operations and sourcing, succeeding Gordon Shank, who took the new position of chief marketing officer on a global basis.

Mr. Shank's position is unchanged, although the spokesman said the executive's role is still in development.

In the latest moves, Robert Holloway becomes VP of marketing-youth, with responsibility for marketing all Levi's products to an age group of 15- to-24-year-olds. Mr. Holloway worked in merchandising and marketing in Europe before moving to the U.S. in 1996; in April, he was named VP-brand development, a title now eliminated.

James Capon, president of the Dockers brand, becomes VP of marketing-young adults (ages 25 to 35) and is responsible for the Dockers and Slates brands. Reporting to him are Vince Tavani, marketing director for Dockers, and Bobbi Silten, marketing director for Slates. Mr. Tavani previously was VP-merchandising for Dockers while Ms. Silten worked in merchandising and marketing on Dockers Khakis for Women.

AGENCY STATUS UNCERTAIN

David Love, a director of product development for Dockers, has been named product services director for youth.

Tom Fanoe, president of the Levi's brand, and Jan Westfall, president of Slates, will be looking for other positions, either within or outside the company, the company spokesman said.

Levi Strauss' 1997 sales of $6.9 billion were down 4% from 1996. The company, which had a leading 31% share in the jeans market in 1990, dropped to an 18% share in 1997, following VF Corp. and private labels, each with a 24% share, according to consultancy Tactical Retail Monitor. The company has faced increased competition from designer labels and store brands.

Officials were uncertain how the changes would affect agency assignments. TBWA Chiat/Day, Venice, Calif., and San Francisco, is the agency for Levi's jeans, while Foote, Cone & Belding, San Francisco, has the Dockers and Slates brands.

Levi Strauss spent $100 million on '97 advertising, with $57.6 million backing its Levi's brand products, $31.8 million for Dockers and $10.5 million for Slates, according to Competitive Media Reporting.

CONNECTING WITH YOUTH

To connect with youth, the marketer has begun a new ad campaign, via TBWA Chiat/Day, for Levi's dark, stiff denim styles; creative uses Levi's signature red tag as the icon.

At the same time, Levi's is beginning an outdoor teaser campaign for its retro-inspired Red Line sub brand, with posters showing photographs such as a bandaged hand. The jeans, reminiscent of original models that had a red thread on the fabric running around the cuff, bear no Levi's markings and are intended to be "discovered" by the consumer.

Levi's higher-price Silver Tab line also is getting a new campaign and one for soft jeans is expected to be launched soon.

Copyright August 1998, Crain Communications Inc.

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