LEVI STRAUSS SIZES THE RETAIL SCENE CUSTOM-FIT JEANS, STORES ARE PART OF THE NEW PLAN

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Levi Strauss & Co.'s program for selling custom-fitted jeans shows how the marketer is looking for a better fit, not just with its clothes but in reaching the consumer directly.

Women can now use a computer to custom-order a pair of jeans, but only at Levi Strauss-run stores. That's part of an effort by the world's largest apparel maker to move away from being a merchandising organization, concerned with forcing its products into the marketplace through alliances with retailers. Instead, Levi Strauss wants to become a full-fledged, brand-focused organization tied directly to consumers.

"We aspire to be a marketing company," said John Pachtner, senior manager-corporate communications.

In so doing, Levi Strauss hopes to fend off the growing threat from retailers' private labels, plus make new forays into retail with its own stores. Levi Strauss is in the midst of a multiyear reorganization, costing hundreds of millions of dollars.

The marketer introduced the Personal Pair Custom Fit Jeans for Women program last year at four Original Levi's Stores. In the program, a customer is measured by a sales clerk; then a computer indicates which of four prototype jeans would fit best. The customer tries on that pair, and further alterations are registered in the computer. The custom-fit jeans cost about $75, $10 more than retail price. They're guaranteed to be available in three weeks.

Seven more Original Levi's Stores will be added to the program next year; there are no plans to offer the custom-fitted jeans at other retailers.

Levi Strauss plans to increase the custom-fit program significantly as more retail outlets open. Last month, the Federal Trade Commission OK'd a Levi Strauss request to open 194 stores, of various formats, during the next five years. Under a 1978 consent decree involving a price fixing case, Levi Strauss was barred from opening retail outlets.

Currently, Levi Strauss owns two Original Levi's Stores and runs 10 others in the East and Midwest under a joint venture with Designs Inc., Boston.

Levi Strauss downplays the retail expansion, saying that Original Levi's Stores are only small boutiques, but expansion is certain to give the marketer more control of its brand.

Levi Strauss has severed business with hundreds of small stores that didn't meet its expectations of a $10,000 annual minimum order demand.

Store owner John Nelson in Macomb, Ill., was chagrined at first for being dropped, but now notes that he suffered through years of incomplete orders and poor service from Levi Strauss.

"I have sold more Girbaud [VF Corp.'s designer brand] than Levi's," he said, "and they won't allow any discounting." Mr. Nelson is also expecting soon to stock Guess? for his college town clientele.

Mr. Nelson said he plans to stage a celebration when he sells his last pair of Levi's in stock: "Maybe we'll hold a drawing and let the winner shoot up the last pair, or maybe we can cut 'em up, tie 'em up and make dog toys out of them."

Levi Strauss only now has awakened to the long-term dangers of dealing through retailers, analysts say.

"They sense now that their reliance on battered, bankrupt retailers and retailers they don't own is a very serious threat to the future of their company," said Alan G. Millstein, editor-publisher of Fashion Network Report, New York.

He said the company failed to see the danger when The Gap dropped Levi's for its own private label and grew to hold one of the nation's leading denim franchises.

Other private-label jeans are also a threat. In 1993, private labels led the denim market for the first time by capturing a 28% share; then came VF at 27% and Levi's at 26%, Mr. Millstein said.

Levi Strauss is also reorganizing to promote a brand focus. The separate men's, women's and youthwear divisions are being scrapped. Divisions instead are being organized by brand: Levi's, the traditional denim jeans products; Dockers, the casual clothing line; and Brittania, the value-price line offered to discounters.

No changes are anticipated in Levi's agency roster, though there have been some staffing changes within the shops.

At lead agency Foote, Cone & Belding in San Francisco, Executive Creative Director Mike Koelker will step back from some of his responsibilities this year. Agency officials expect to name a successor on the Levi Strauss account soon. Mr. Koelker handled the Levi's brand for 27 years and produced some of its most memorable work, including "501 Blues."

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