Reeling from intense competition that continues to eat away at its market share, Levi Strauss & Co. on Monday unveiled more details about several marketing and manufacturing thrusts aimed at reviving the 148-year-old company's faded image among fashion-conscious younger consumers.
The efforts include Levi's first-ever catalog and online sales campaigns, a renewed emphasis on selling through specialty shops where many younger consumers shop and the addition of new apparel brands through acquisitions. The company also hopes to more effectively link its familiar Levi's logo tab to emerging music and sports stars who often spark fashion trends.
Levi also said its "hard jeans" ads will be replaced by a series of unscripted commercials featuring young consumers that will begin airing Monday during shows such as "South Park" and "Dawson's Creek."
Acknowledging that marketing alone won't solve its woes, the privately held company with $6.9 billion in revenue is continuing a restructuring designed to cut costs and help speed new product to market. The restructuring is intended to enable Levi to more quickly respond to changing fashions by introducing new lines at least four times a year.
Robert Holloway, a former Levi executive in Europe who recently was named vice president of domestic youth category sales, described the flurry of activity as a needed antidote for a company that had grown complacent.
"What my message is now about is getting this company really focused on a younger target . . . by relating to them with products they want and need," Holloway said. "That's what's going to rekindle Levi in terms of pure financial performance."
A year ago, Levi was forced to close 11 plants and lay off 6,400 employees. Last week, an inventory glut of five-pocket jeans forced a two-month shutdown of seven U.S. plants with 4,000 workers.
"Everyone in the basic jeans business has been going through a difficult phase," Holloway said. "But we had a choice to make--either not face up to the business issues or re-balance our inventories."
Levi isn't the only long-established denim label facing challenges. But competitors such as VF Corp.'s Lee brand are managing to build sales through new lines such as Pipes, a flowing, baggy jean that sells well among young consumers.
Levi hopes to jump-start interest among teens and young adults with more street-level marketing, including alliances with up-and-coming bands. In March, Levi will produce a line of clothing to be featured in MGM's "The Mod Squad" movie. But while Levi officials say they expect to drive additional sales through avenues such as online and catalog sales, retail industry observers say the denim firm is clearly playing catch-up.
Holloway said advertising created by TBWA/Chiat/Day's San Francisco office, including the recent ads boasting of the product's durable nature, were successful. But observers maintain that Levi's overall denim sales spent most of the last year in a double-digit free fall.
Levi's share of the overall men's and women's jeans market fell to 16.9% at mid-year, down from 18.7% at the end of 1997, according to Tactical Retail Monitor, a New York-based market research firm.
Observers say Levi faces a rough road. "The market isn't anything like what Mr. Levi and Mr. Strauss encountered when they made their first pair of jeans," said Kurt Barnard, publisher of Barnard's Weekly Retail Marketing Report.
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Levi Strauss & Co.'s share of the denim jeans market has been falling for the better part of a decade. The slide continued this year, with VF Corp., owner of the Lee and Wrangler lines, stealing market share. Market share for jeans makers in 1990 and the first half of this year:
Market share for men's and women's denim jeans
Company 1998* 1990 Levi's 16.9% 31.0% VF (Lee, Wrangler) 25.3% 17.9% Private Label* 20.2% 3.2% Licenseed/Designer 7.0% 6.0% Gap Inc. (Gap, Banana Republic, Old Navy) 4.9% 2.7% Other 25.7% 39.2%
Levi Strauss is replacing its "hard jeans" ads, top, with ads featuring and targeting young consumers.
* Jan. through June.
\o7 Source: Tactical Retail Monitor\f7