‘Indian market is a strategic priority for Levi’s’

NEW DELHI: On a week-long visit to India to oversee the company’s operations, Charles V Bergh, president and chief executive officer of Levi Strauss & Co., met the American denim brand’s franchisees and distributors. Bergh says India is a strategic priority market that he visits every six to nine months. He spoke of competition in the market and Levi Strauss’s potential in India. Edited excerpts from an interview:

How has India performed for Levi Strauss? Has the company crossed the $100 million sales mark here?

It has. But it is still a relatively small contributor to the company’s overall business. We have got a huge business in the US that is still 50% of our total business. India is less than 5% of our business but it is growing at a good clip.

It is a strategic priority for us for the number of people here. There is enormous upside opportunity in this market.

Are you looking at reintroducing some of your other brands such as Signature, Denizen or Dockers?

First and most importantly, we still have a lot of upside opportunity on Levi’s. We should be able to grow in high single digits or double digits in this market without introducing any new brands.

However, as the marketplace is changing, and, given the strategic importance of this market, we are evaluating reintroducing Signature or Denizen or Dockers.

We had all those brands in the market in the past. They were withdrawn because they weren’t profitable, they weren’t creating value.

But as we fixed our cost structure globally and as we have got better from a supply chain standpoint and the strategic relationships that we have developed with our suppliers, we could now introduce any of those brands and have a viable, profitable business in India.

Are you also eyeing store expansion?

Yes, we are, on a global basis and in India.

In India our business is entirely based on franchise. We have 22 franchise partners here. That is down dramatically from when I joined the company. On my very first trip to India we had 300 stores and about 150 franchisees.

So every franchisee had only two stores. That was not a recipe for success. Franchisees didn’t have the scale or the capability so we focused on narrowing down the number of franchisees.

Who sets the fashion for jeans globally?

Over time, India will become more of a trend-setting country. I would say the denim culture that drives trends the most is Japan, which quickly then goes to South Korea and China and then spreads to the rest of the world.

We watch Japan and South Korea very closely. The great thing about India, especially, now in the internet age, is that the consumers are very much in tune with what’s going on in the rest of the world.