Levi's struggles to redefine itself as a premium-denim purveyor

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Levi Strauss & Co. invented jeans, but that can be a liability when trying to sell a pair for more than $100. As the market for ultra-pricey denim continues to explode, Levi's profile among fashionistas is lower than the waistband on a pair of Earl Jeans.

While Levi's was focused on fixing its core jeans business, newcomers such as Earl as well as Seven for All Mankind, Citizens for Humanity and True Religion have staked their claims to the lucrative $1 billion-plus luxury-denim market. But now that the San Francisco-based apparel maker is out of the red and stabilized at roughly $4 billion in annual sales, it plans to invest heavily over the next year to spotlight its struggling, 4-year-old Levi's Premium collection.

Karen Riley, senior marketing manager of Levi's sub-brands, said that facing off against the likes of Seven and True Religion and the hundreds of other names that crop up daily in boutiques "is definitely a challenge for us because we are the $35 out-the-door brand consumers are used to getting at the department store."

But, she said, "We invented the jean and no one can do it better," recalling a recent shopping trip she took where so many 2-year-old brands made claims of being "authentic."

While Levi's has certainly staked its claim over the years on its brand's truly original-since-1850 authenticity, some fashion-industry observers note that may not be enough to make it a high-end leader-and could actually hurt its chances. "Levi's is going to have to prove to people that the product is competitive from a style and quality standpoint, and that has to be based on something more than the heritage of Levi's, which seems to be their endless fallback position," said Hamilton South, partner at luxury consulting firm HL Group.

Introduced in 2001 with a variety of styles priced between $110 and $180 and sold at better department stores, what the Levi's Premium line needs is better marketing. To go "from zero to 60" in premium, a segment led by women with whom "Levi's has never really found its voice," Mr. South said Levi's is going to have to develop a much more direct dialogue with fashion magazines, gain distribution in trendy boutiques such as Manhattan's Scoop and L.A.'s Kitson and use the language and photography of real fashion players.

"Until now," he said, "Levi's has seemed unwilling to play the game."

Sally Singer, fashion news/features director at Conde Nast Publications' Vogue, believes it will be "tricky" to take what is a "utilitarian men's basic and make it stick in the fashion world." But, she said, if anyone can do it, it would be Levi's U.S. Creative Director Caroline Calvin, whom she called "a major creative talent."

Ms. Calvin helped develop Levi's Vintage Clothing, a collection based on replicas of Levi's archives such as a line of 100 limited-edition jeans for fall 2005 called the XX that will retail for $501, but that Ms. Singer likens to an "art project." Among the initiatives Levi's has planned for its premium push is a partnership with the Warhol Foundation to create a collection for spring '06 based on the famous art stylings of Andy Warhol, who wore Levi's. According to Levi's spokeswoman Amy Gemellaro, the collection "speaks to the power of Levi's and what makes us unique, which is that people [like Andy Warhol] have loved and cherished the brand since the 1800s." Though the company's mainstream ad campaign from Bartle Bogle Hegarty, New York, features the theme, "A style for every story," getting the word out about premium will likely require a more targeted tale.


Traditional media may be employed, but "underground" events like a party Levi's threw in an L.A. home last fall for its Ultimate boot-cut jeans with some of ABC's "Desperate Housewives" will be crucial, as will working with higher-end retail customers to develop ads and displays that feature the premium cuts prominently.

Hope Greenberg, fashion director at Conde Nast's Lucky, questions how, when it already has great fashion-forward styles that aren't that expensive, Levi's will convert people to pay more.

Maybe it won't have to in order to make the effort a success, suggests Marshal Cohen, chief industry analyst at NPD Group. "This is about selling enough to get recognition for having a premium product," Mr. Cohen said.

Since brands commanding more than $100 at retail are still only 1% of the $6.8 billion jeans market, perception might be more important than pants sold. "After moving down-channel to the lower end, Levi's needs to regain traction on the upper end to bring more cachet to the brand at all levels," Mr. Marshall said. "An expensive product creates a level of consumer embrace beyond what most people can do in their own advertising campaign."

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