Levi's Goes Back To Its Roots To Try To Stay Current

Forbes

21-07-2025

Levi Strauss is the leading jeans brand in the world, but has had a troubled recent past. (Photo by ... More)
Much has been written about the challenges facing legacy brands in today's hyper-competitive business environment. Often, the comments refer to technology companies that once seemed all-conquering and then fail to keep up with developments and find themselves outflanked. Think Nokia, BlackBerry and Intel. But retail, where customers can be especially fickle, is also highly vulnerable. Consider the recent struggles of The Gap and J Crew, to name but two former success stories that have lately found the going hard.
For the jeans maker Levi Strauss, though, the challenge is especially tough since it has to balance its heritage — it claims to have invented the blue jean in 1873 — with keeping up with fashion. And it is fair to say that in recent years that has been something of a struggle. Originally listed on the stock market in the U.S. in 1971, the San Francisco-based company was taken private by the founder's family in 1985, only to return to the public market in 2019. But, whether in public or private hands and whether run by the family or professional managers, it has battled with increasing competition from both budget lines and, increasingly, premium denim brands and a perception that its customer base is made up of ageing baby boomers.
However, the company currently appears to be enjoying something of a renaissance. A process of transforming the group that began under former chief executive Chip Bergh has been continued by Michelle Gass, who became chief executive in January 2024 after joining the company as president from the retailer Kohl's the previous year. Crucially, it is based on a realization that the way to move forward was to reconnect with the company's origins. It has abandoned its budget denim lines, sold the struggling chinos brand Dockers and — while it has a foot in the activewear camp through ownership of Beyond Yoga — is focusing on promoting quality denim clothing at affordable prices as epitomised by its iconic 501 brand. And the fruits of this strategy can be seen in results for the second quarter of the financial year published earlier this month. Revenue was up 6.4% from a year ago, to $1.45 billion, while margins expanded to a record 62.6% and earnings per share were up 37%. With the company's share price up more than a fifth this year, its market value is now $8.3bn, below its peak, but well up on the $5.3bn of a couple of years ago. Moreover, executives are sufficiently confident that they have raised revenue and earnings per share expectations for the full year.
The global performance was matched by that in Europe where Lucia Marcuzzo has been the region's managing director since the spring of last year. An executive with more than two decades' experience in the denim sector — she was head of retail at Diesel before joining Levi's European operation, initially as vice-president in charge of retail — she is clearly proud of the strong growth 'in a challenging environment.'
In an interview in London earlier this month, Marcuzzo explained the elements of the strategy and how they were paying off. Speaking in the private Haus of Strauss reception area where Levi's invites celebrities and other special customers to select personalised items, she explained that she felt being an icon and a centre of culture mattered. 'Not only mirroring the culture but contributing to shaping the culture' was a key part of building a coherent brand that connected 'generation after generation.'
As evidence, she pointed to how the company had collaborated with Beyonce´, a long-time fan, after getting a hint that the company would be referenced in a song on her latest album, Cowboy Carter. Similarly, Noel Gallagher visited the Haus of Strauss to select the shirt he wore for the first of the Oasis comeback concerts. Last month, Levi's played a central part at the Primavera Festival in Barcelona. Another collaboration, with the shoe company Nike, sold out in nine minutes and forced the closure of the store in London's Regent Street.
But this is about more than seeking to be cool with the young crowd. The connection with customers means that the company has more than 38 million members of its loyalty scheme around the world, with nearly 14 million in Europe. 'It's a source of insights. We learn from them what they want,' explains Marcuzzo.
Although some might feel that the stores are geared too much to younger consumers, she insists that people of all ages visit them. Great effort is taken to train staff to ensure they provide good service, with a particular emphasis on giving women the service they want, while store managers are treated as if they are 'CEOs of their stores' and are able to choose which items to stock based on local demands with the aim of making them more engaged. Those that want an even more bespoke service can opt to have their jeans or jackets made to measure at one of the Lot 1 studios in London and a handful of other cities around the world. Moreover, the focus on direct to consumer that is a key part of the strategy means that the company's website is enhanced by AI and other technologies to give the customer similar advice on fit and size to that they would receive in-store. At the same time, the decision to rationalise its warehousing into one location for online and in-store sales means that there should be no delay in receiving items ordered online.
That said, 60% of customers are still buying in 'multi-brand environments.' While the company is now more likely to end relationships than open new ones, it recognizes that every element has a role to play and works hard to support partners — whether large department stores such as London's Selfridges, smaller high street shops or online retailers. 'Our mindset is to have a direct connection with the customer no matter where they buy,' says Marcuzzo.
Having all stock in once place also enables the company to be faster to market and to respond to information it receives from staff via its internal social media. 'We are doubling down on tools that serve the purpose of building more agility. We are pushing decisions closer to the customer and empowering stores,' she adds.
In addition, the company is looking to add to its offering. The global leader in jeans, it is renowned for innovations in fabrics and colours and sees opportunities in the market for tops. It is also very much targeting women customers. No doubt with one eye on its premium competitors, it is in the autumn launching a limited edition Blue Tab line that will utilize sought-after Japanese denim to offer 'quality at an affordable price.' And there will be more, carefully-chosen, collaborations.
But Marcuzzo and her colleagues on the executive team are only too aware of the harsh realities of the current business climate. 'The new norm is resilience and agility,' she says. 'While we have a strategy, we are constantly adjusting.' In keeping with this, the company has a diversified supply chain and — while the recent results acknowledged the potential impact of tariffs (with jeans specifically mentioned in the tit-for-tat between the U.S. and the E.U.) — Marcuzzo stresses that the European business does not import from the U.S.. Even here, though, she sees a potential upside. 'In times of uncertainty, people revert to brands they trust,' she says.