Every second that goes by marks another sale for one of Levi's most popular items. But if you're thinking that's a pair of jeans, you're wrong.
Levi Strauss & Co. might have started as a jeans purveyor, but it has since moved beyond its single-product roots into a more diversified mix of apparel offerings, including a robust global T-shirt business nearing $1 billion in sales. At 165 years old, Levi's is a lifestyle brand for the masses.
"Our T-shirt business is on fire," says Jen Sey, senior VP and CMO at Levi Strauss, referring to the signature batwing logo shirts.
Few brands—and logos—have had such enduring appeal, especially at a time when the apparel and retail landscape is littered with the bones of denim rivals. Levi's was near the graveyard itself nearly two decades ago. A merchandising overhaul that moved away from trendy but forgettable offerings into a collection with a more long-lasting, classic appeal, combined with an invigorating marketing platform and focus on digital innovation, have helped the brand avoid such a fate.
Now, under CEO Chip Bergh's leadership, which began in 2011, the San Francisco-based brand is hoping to grab more apparel market share through modernized tech and customization offerings designed to court younger consumers. It's also creating a tourist destination with the opening this month of a new 17,000-square-foot flagship store in Times Square. And it's weighing in on social issues like gun control to resonate with youth increasingly looking to marketers to take on causes.
"The heritage of the brand, and yet being modern, is always the tension Levi's has to deal with," says Kevin Keller, E.B. Osborn professor of marketing at Dartmouth University's Tuck School of Business. "Here's a brand that has so much heritage, but you can't let that define who you are, you've got to be modern, moving forward and relevant to a much younger audience."
Stuck in the middle
Levi's recently reported its fourth consecutive quarter of double-digit revenue growth. For the third quarter, which ended Aug. 26, Levi's generated net revenue of $1.4 billion, a 10 percent rise over the same period a year earlier. Net income for the quarter was $130 million, or 45 percent more than last year. This growth follows a strong 2017, when Levi's logged revenue of $4.9 billion, its highest sales in a decade.
These tallies are still a far cry from the brand's '90s heyday, when Levi's enjoyed revenue topping $7 billion driven in part by its iconic "Levi's 501 Blues" campaign from a decade earlier. But that momentum could only protect the label for so long when a host of rivals were popping up and stealing share. By the end of the '90s, Levi's faced competition from below—Gap was ramping up its denim offerings, while department stores were creating their own private-label jeans brands, such as JC Penney's Arizona brand—and from above, with the advent of designer denim, such as 7 for All Mankind and Citizens of Humanity. By the early 2000s, Levi's occupied the unenviable position of the middle, where it was squeezed from all sides. It tried to react by chasing trends, to disastrous effect.
"When you work in a trendy business like fashion and apparel, you can get afraid of not being cool and chase it in an inauthentic way," says Sey. "We did some of that and it didn't resonate with consumers."