Levi’s is probably the world’s most famous and most popular denim brand: born as a symbol of independence and transgression, over the years it has become a great classic of casual wear (i.e., casual wear). Now it has plans to expand: the company’s management said that over the next five years it will turn it into a group that invests in other apparel sectors, acquiring brands that don’t just sell denim (that is, the fabric from which jeans are commonly used.), which are instead a specific type of pants he invented. founder of Levi’s).
At the beginning of June, despite the moment of international economic uncertainty, Levi’s CEO Chip Bergh presented investors with a very ambitious growth plan, aiming to achieve sales of $10 billion by 2027 (in 2021 there were 5, 8). He said he wanted to turn Levi’s into a conglomerate that would operate several other brands, while continuing to work on the fame of the original, which would open hundreds of new stores around the world.
Levi’s story began in 1853 with the founding of the company by Levi Strauss, a German immigrant to the United States. Revenue peaked in 1996, at more than $7 billion at the time, but in the early 2000s, growth stalled and sales stabilized. In 2011, Chip Bergh became CEO of the company and soon after, growth resumed, mainly due to the selection of high-profile retailers and cooperation with luxury brands, such as Miu Miu, the brand of the Italian Prada group.
Until a few years ago, most men who were teens in the 80s and 90s bought Levi’s jeans. Berg attempted to reverse this trend by focusing on women’s jeans, and within ten years, from 2011 to 2021, was able to increase net revenue from 26 to 33 percent. Interview with a fashion website fashion business She said there was no reason why women’s and men’s sales couldn’t keep the same percentage.
One of Levi’s best decisions has been to always keep jeans prices low enough to remain competitive both in terms of more expensive models from the luxury brands, and in comparison to those of budget brands, which cost a bit less but don’t have the history and quality of Levi’s.
The strategy of acquiring new brands suggests a willingness to intervene in a more radical way. Levi’s already owns another casual apparel brand, Dockers (founded in 1986), and last August it acquired Beyond Yoga, a sportswear brand, for $400 million. Harmeet Singh, Levi’s chief financial officer, said he would buy other companies of the same size or slightly larger to grow them quickly, a strategy similar to that of big luxury groups, such as LVMH (which controls Louis Vuitton and Christian Dior, among others). , Bulgari, Fendi and Celine) or Kering (which owns, for example, Gucci, Yves Saint Laurent, Balenciaga, and Bottega Veneta). The concern is mainly aimed at brands that produce T-shirts, women’s clothing, shoes, jackets and coats.
Among other things, the Levi’s brand found success not only with denim in 2018, when its solid-colored T-shirts with a large chest-print branding were the height of popularity and visibility.
Another goal for the company in the next few years is to increase sales made through e-commerce stores and brands, without intermediaries. Today these channels cover about 36 percent of total sales, but the goal is to reach 55. To do this, hundreds of new stores will open on average smaller than those already in existence: a hundred in the United States and others. in the rest of the world.
The overall strategy is to compete with much larger companies, such as Gap, which has an annual turnover of $16 billion and which, in addition to the eponymous brand, also owns Banana Republic, Old Navy, Intermix, Athleta, Janie and Jack.