Levi Strauss & Co. recently announced its IPO on the New York Stock Exchange. As its debut started successfully registering a 32% increase of price per share from the initial US$17.00 to US$ 22.22, Chip Bergh, CEO, Levi Strauss & Co., explained the company’s future strategies regarding this step during an interview broadcasted by CNBC. (LINK: https://www.cnbc.com/2019/03/21/levis-ceo-says-athleisure-was-a-throwdown-moment-for-denim-market.html ).
SI collected some of Bergh’s most interesting statements and comments:
“We are denim. We are the market leader globally and we’re creating the denim wave.”
“We have been driving the category with innovation across our men’s business and our women’s business, and we have expanded other categories. We’ve closed 2018 with a 14% growth, plus 8% the prior year, and the business is really humming right now.”
"To be successful, it does come down to strong brands. Consumers love an emotional attachment with their brand."
“Our brand’s growth is sustainable and is not a cyclic trend. Maybe this growth will not be double-digit forever but we are building our category and are expanding in other ones. Last year, when we finished the year, our growth was really broad-based as we grew in every single category, in all of our geography and in every single geography. If you look at all of our channels we grew wholesale and retail both in brick-and-mortar and e-commerce. It was a very, very broad growth last year and we are confident we can continue that.”
“Our strategy is based upon one of our key strategic choices we did seven years ago when I came on board: it was to become a world class omnichannel leader. Most of our capital investment is going into retail, wholesale and e-commerce for building that seamless consumer experience together. We want to connect it by investing in technology.”
“We want to further invest in RFID [Radio Frequency Identification] across our business in the US and the UK–and that’s really turning in the money.
Every one of the products in our stores is tagged with RFID. I was in our Times Square store and wanted to buy a certain item, but they didn’t have it in my size. They scanned the tag and could see that my size was available in the back room. Two minutes later I was in the dressing room trying them on. A year ago that one would have been a lost sale. RFID gives us instant clear visibility to the store inventory.”
“Women’s category is 14% of your business. Back in 2013-2014 the big headlines said it was the death of denim because of athletic thighs. In those years we brought our denim suppliers to our Innovation Center and we understood what women were really telling us by wearing thighs and why they used them in a denim occasion: they wanted to wear a soft, stretchy, comfortable material that made them look great and gave them confidence. And that was driving that conversion. So we innovated around soft stretch and comfortable denim which we can now do. We developed our four-way stretch denim so that women don’t get baggy knees–their biggest dis-satisfier. By that in the middle of 2015, we relaunched our business and have grown 14 quarters in a row and in the last eight quarters reached a double-digit rate. And that was major part of our growth. We were just under US$8 million just on women’s bottoms about three years ago and we are now about US$1 billion. We are number one globally but not in that category in the US. For this we can continue to grow at an accelerated rate in the women’s business. So there is a lot to do in that.”
“Our own core business is basically men’s denim wholesale in our top five main markets and we are growing at an accelerated pace outside of the category. So tops are a good example. We grew our tops business 48% last year. Though we are not even 1% of that market share. We have done behind it by offering our Batwing tees, graphic tees and fleece. This is just a starting point and the rest of our tops business also grew. And we’ve doubled that business in the last three years.”
“This brand stays for everything good about America. It stays for freedom, democracy, allowing people to express themselves, authentic self-expression. This is what Levi’s is all about. We are not seeing any backlash.”
“Maybe what happened at Diesel is one of our share donors...We think there are still a lot of opportunities for us. I’m not at all worried about denim and what is happening to denim. As I previously said: We are denim and will continue to drive this category with great innovation and marketing that connects with consumers and sends them into our stores.”