Levi's Changes, Adapts To Stay 'America's Original'

Jeans. We’ve ripped them, embroidered them, stone-washed, whisked and patched them —even dyed them a variety of different colors.

There’s nothing more versatile. They go from the office to the backyard to the restaurant.

“There’s no more democratic material than blue jeans,” said Tim Gunn of Project Runway. “I can’t think of a more flexible material than blue jeans. I can’t think of a more profound design challenge than to use, this particular textile.

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Jeans are a certified wardrobe staple. No other garment comes close to shaking their status as an American icon.

And, for more than a century, one jean has stood as the model for them all — Levi’s.

The Story of Levi’s mirrors the growth of America. This company, once a regional dry goods business, is today a multi-billion dollar international corporation. It also reflects the challenges America faces competing in a Global Economy.

But one thing’s for certain, Levi’s created a phenomenon that got the whole world wearing jeans. While there are sure to be more bumps and battles to come for Levi’s in this fashion world and it’s ever-changing trends, it’s truly an American Original.

“All jeans are basically evolutions of the old 501, said designer Stefano Aldighieri. “So, you try to tweak it, you change your fit a little bit, you change all the trim and accessories and all the stuff that you can put on top of the jeans. But the basic pant is still the same.”

It’s the best selling jean of all time. It spans more than five generations. It even has an online fan club with more than 700 members worldwide.

But in 2001, the 501 seemed to be sitting on its laurels, while another round of jeans wars (the first launched with Calvin Klein’s famous Brooke Shields ads) was revving up.

The company’s CEO John Anderson admits Levi’s could have been better prepared.

“A lot of the trends moved to loose fitting jeans, over-sized jeans,” said Anderson. “The 501 can be worn that way, but we should have brought our jeans, not just the 501, to address that market trend. We didn’t bring them out fast enough.”

And, in the early part of the 21st Century, there are plenty of competitors wiling to take the old standard down — brands like True Religion, 7 for All Man Kind, Citizens of Humanity and Rock and Republic.

While 501s sell for $35, the going price for the new designer jeans is $150 to $500. And while it isn’t initially easy for consumers to pay premium prices for a pair of jeans, many eventually take the plunge.

“You were buying into the Cameron Diaz, or Jessica Simpson celebrity lifestyle,” said Suzanne Kapner of Fortune Magazine. “And this was killing Levi’s, because Levi’s still had the connotation of the basic worker jean. And that had worked for them over the years, but suddenly that wasn’t cool anymore. And so they were losing a tremendous amount of market share.”

The sales growth was staggering. One company, True Religion, started selling jeans in 2003, and made $2 million dollars in sales its first year. Three years later, the company’s net sales were over $100 million dollars.


Meanwhile, Levi’s hadn’t seen a profit move substantially in four years. Levi’s needed to do something radical.

Two Important Decisions

The company made two important decisions: to create new partnerships with new retailers, and to come up with some new lines.

One of those decisions came as a surprise. The same year it celebrated its 150th birthday, 2003, Levi’s rolled out a new line called Signature jeans, into every Wal-Mart store in the United States.

The jeans are missing two Levi’s trademarks — the red tab and the leather patch, but they’re priced at an affordable $20. They bring in sales of over $87 million dollars in 2005. After Wal-Mart’s success, Sears and Target decide to sell the new brand, too.

But selling more jeans only addressed one of Levi’s problems.
The company had to find a way into the designer jean market that has eluded it for so long.

The challenger it threw into the ring wasn’t a huge stretch for the company. Called Capital E, it was designed to play to Levi’s strengths. No company knows vintage like Levi’s does, and this line, with its contemporary styles and names, also has a vintage feel with recycled rivets, buttons and zippers. And sells at upscale stores.

In-between its high and low end lines, Levi’s now makes just about every style its competitors do — skinny, relaxed, slouch, flared, boot-cut.

“Levi’s is reinventing itself with some kind of jeans that sort of blow up the iconic possibilities of it, you know, making the rivets bigger, making the back label bigger,” Barbara Lippert of Ad Week said. “Sort of exaggerating all those qualities in a fashionable way and I think that’s probably the only way Levi’s can go.”

The added attraction, according to Levi’s CEO John Anderson is that many of them are made of 100 percent organic cotton. The company is focusing on using less energy and leaving a smaller footprint while bringing products to market that are ecologically friendly.

The stage is set for Levi’s to show off its new lines. The question is will the big buyers, the 18 to 25 crowd, like what they see.

“You can’t make a pair of pants that fits everybody,” said Stefano Aldighieri, a designer for 7 For All Mankind. “It’s about proportions, it’s about body shapes and styles and everything. And so, you will have different fits and different body types in different ways.”

Today Levi’s has retail stores around the world, selling a complete line of clothes. It’s as much a new marketing tool as a venture into the retail business.

The 18 to 25 crowd, the youth market so important to the fashion industry, is drawn to the uniqueness of specialty stores. Levi’s opened seven in 2004 and has grown to more than 30 since.

What makes Levi’s mission so precarious is that it has an age gap to navigate. How does it keep happy the baby boomers who made it into a fashion icon in ‘60s and still appeal to the baby boomers’ kids?

“When you’re attached to the fashion market, we all know that what was in two years ago or what your parents are wearing is not what the youth market wears,” said Jonah Bloom, editor for Advertising Age.

“And the incredible thing is that, you know, those younger people, it might be that you’re talking about a 16-, 17-year-old who’s feeling that that’s more rebellious to wear a different brand and that they don’t want to be seen to be doing what their parents did. The fact is that those people end up being the trendsetters for their parents.”

“Levi’s has made a number of different iterations, which have been their attempt to kind of recapture the cool about their brand, get people talking about it again, get, you know, fashion editors including them in shoots again,” Bloom continued. “You know, just generally get the celebrities back in.”

In 2007 the company invested more dollars into the youth market’s favorite tool — new media.

“They’ve been really able to tap into the Web in really new and refreshing ways, you know, with online-only films that are very entertaining, that people sort of spread virally and ads that appear on Myspace, for example,” Reena Jana, editor for Business Week, said.

There’s one thing for certain: like their parents and grandparents before them, this new generation is in love with jeans. They’ve never been more hip or fashionable. But then jeans became something beyond fashion a long time ago.

Levi Strauss and Co. has achieved a remarkable feat for any company, let alone one in the unpredictable fashion business. It’s persevered over five generations, become a global leader in 110 countries, and maintained a status few companies achieve in a life-time, as an American icon.

“If you look at any brand survey, Levi’s ranks among the top most-coveted, most well-recognized brands,” said Suzanne Kapner of Fortune Magazine. “So that’s very important. And the most important thing for longevity is for a company to be able to change and adapt.”