Levi's CEO blames slow launch on spots

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Levi Strauss & Co.'s launch of Type One jeans has been a disappointment, and President-CEO Phil Marineau is placing the blame on advertising, particularly a flashy Super Bowl spot featuring a couple untouched by stampeding bison.

"It wasn't a Levi's ad," Mr. Marineau said in a meeting with analysts last week. "It didn't have a sense of humor about itself. It was certainly a poor Super Bowl ad."

Type One, featuring exaggerated design elements such as bright stitches and oversized pockets, is Levi Strauss' latest attempt to gain a fashion edge over trendy jeans brands such as Lucky.

Levi Strauss saw sales fall 3% last year to $4.14 billion. The San Francisco-based apparel maker set a target for Type One to account for 5% to 6% of U.S. sales. The company did not divulge actual sales figures during its meeting with analysts last week, but acknowledged that they were below target. Mr. Marineau said that as a result, he has sent ad agency Bartle Bogle Hegarty, New York, back to the drawing board.

"The advertising I'm not happy with," he said. "That's why we're changing it." Mr. Marineau said the spot, set in a futuristic city and carrying the tagline "Cool since 2003," did not express the 150-year old brand's attitude. "I do want to have what I would consider advertising that works harder for the brand on Type One as we go into the back half of the year." He said the revised campaign would appear during the back-to-school season.

A spokesman said the company is not conducting a review. " BBH remains our agency," he said, adding that Levi's has two spots scheduled for later this year, and that the bison spot had finished its planned run. Bartle Bogle referred calls to the client.

While some analysts agreed with Mr. Marineau, one said the company must share the blame. "If you don't have an image in mind, if you don't have a customer in line, you're not able to direct the ad agency," he said.

Levi Strauss spent $92 million on measured advertising last year, according to Taylor Nelson Sofres' CMR. The remainder of this year's budget will be used to back Type One jeans, Mr. Marineau said. Levi Strauss is taking other steps to help push the line, which he said has strong appeal among Hispanic and African-American youth. New washes of the jeans will appear in stores to encourage boys to experiment with the style, and a marketing program designed to encourage youth to at least try the jeans on in stores is planned.

The renewed push for Type One comes as Levi Strauss prepares to launch a line of Levi Strauss Signature jeans in June at Wal-Mart Stores. Those jeans, priced in the range of $20 to $25, will be supported with in-store marketing only, handled by Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, San Francisco. They are projected to give the company a sales boost of 2% to 3%.

The success of the Wal-Mart deal is seen as crucial to Levi Strauss. Howard Davidowitz, chairman of retail consultant Davidowitz & Associates, New York, said the Wal-Mart connection has the potential to add $500 million in sales annually. "Levi Strauss has 100 problems," he said. "One of the worst is that it's sold in department stores, a non-growth channel. If Levi's didn't do this, it was headed for extinction. Every time there's an obituary in the newspaper, Levi Strauss loses another customer."

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