Fitting into a ‘denim lifestyle’
Need a top with those jeans? New Levi’s CEO looking to turn brand into true retailer
SAN FRANCISCO — In the Levi’s store on Market Street in San Francisco, the denim maker’s newly extended collection is on full display. Its mannequins are dressed head to toe in its trademark denim. Black denim overalls are paired with a light-blue long-sleeve denim blouse, complemented by a denim cap. Another dons a denim cross-body bag. A wall of blue jean jackets gives shoppers the option to feel like a hippie, rancher or rock star — depending on which they choose.
“It isn’t just walls and walls of jeans,” Michelle Gass said as she scanned the store this month, days after becoming the CEO of Levi Strauss & Co. The assortment of tops, which Levi’s has been producing at a faster rate than it has in the past, was equal to the store’s inventory of jeans.
Gass, 55, wants to make Levi’s not only a brand you think of when you want jeans, but also a place you go to first when shopping for shirts, jumpsuits and puffer jackets. Her goal is to get customers back more often — since people usually buy tops more often than bottoms — and to bring them to Levi’s stores, its website and its mobile app.
“When you’re building stores, when you’re creating an e-commerce site, the consumer wants to explore and shop more than just for a pair of jeans,” Gass said.
The approach is a key element in turning the 171-year-old clothier into a true retailer rather than a brand that sells its wares primarily in other companies’ stores.
Sales through its direct-to-consumer channels, known in the industry as DTC, increased 11% in its most recent quarter, while Levi’s sales through retailers such as Macy’s, Kohl’s and Amazon declined 2%. Overall sales at the company were flat in 2023 compared to the year before.
This is the tough math that Levi’s contends with as investors continue to expect growth from it. Last year, revenue was $6.2 billion. In January, the denim company told Wall Street it planned to increase total sales to $9 billion to $10 billion eventually. It did not set a specific target date for doing so.
But what Gass and her senior leadership team have been clear about is that its stores and the assortment of products it can place there will play a significant role in achieving that revenue goal. Within six years, it wants 55% of its revenue to come from its direct-to-consumer business, up from the current 42%.
“It really is moving this company to be, I’ll call it, a denim lifestyle retailer,” Gass said. “That’s the big pivot.”
The Levi’s stores aren’t new. The company opened its first retail shop in 1983 in Spain; the first one in the United States opened in Columbus, Ohio, in 1991. Levi’s now has nearly 2,300 stores around the world, including 244 in the United States. Last year, it had a record number of store openings: 105.
Levi’s is focusing on training.
The logic is that when Levi’s introduces a new cut of jeans, there is a nearby blouse or jacket workers can present to shoppers that would pair well with it.
“It’s actually a strategy of outfitting,” said Dawn Vitale, Levi’s chief merchandising officer, who describes the assortment as “denim lifestyle,” where one can be decked out with full-on denim regalia.