Project Report on Levi’s Jeans
Mini Project
Submitted By:
Vivek. R. Nair (2010-12) Batch
Under the guidance of Prof. Dr. K. Gopalakrishanan Nair
DEPARTMENT OF BUSINESS ADMINISTRATION COLLEGE OF ENGINEERING TRIVANDRUM
DEPARTMENT OF BUSINESS ADMINISTRATION COLLEGE OF ENGINEERING TRIVANDRUM
2011
Certificate Certified that this report of the Mini project titled “Market Survey of Levi’s Jeans” is a bonafide record of the work done by Vivek. R. Nair in this department as part of the MiniProject work to be
done done in the the seco second nd sem emes este terr of MBA MBA in De Dept pt.. of Busi Busine ness ss Administration, College of engineering, TVM.
Dr.K.Gopalakrishanan Dr.K.Gopalakrishanan Nair, Dept. of Business
Prof. S. Sivakumar HOD, Dept. of Business
Administration,
Administration,
College of engineering,
College of Engineering,
TVM.
TVM.
ACKNOWLEDGEMENT I would like to place on record my deep sense of gratitude to Prof. S. Sivakumar, HOD, Dept. of Business Administration, College of
engineering, TVM for his invaluable help and guidance to shape this project in a symmetric way.
I also express our hearty gratitude to Dr. K. Gopalakrishanan Gopalakrishanan Nair, for his opinion of intelligence, support and guidance which has resulted in the successful culmination of this project work.
I also express my sincere thanks to the 50 participants of market survey for providing me with adequate information for the completion of this project.
A SHORT HISTORY OF DENIM Denim is more than just a cotton fabric; it inspires strong opinions within the hearts of historians, designers, teenagers, movie stars, reporters and writers. Interest bordering on passion can be found among textile and costume historians today, especially in the debate over the true origins of denim. These experts have put decades of work into their research; here are summarized the prevailing opinions about the birth of denim, followed by a discussion of the way Levi Strauss & Co. has helped to contribute to denim’s movement around the world. In 1969 a writer for American Fabrics magazine declared, “Denim is one of the world’s oldest fabrics, yet it remains eternally young.” If continuous use of and interest in an item makes it “eternally young” then denim certainly qualifies. From the 17th century to the present, denim has been woven, used and discarded; made into upholstery, pants and awnings; found in museums, attics, antique stores and archaeological digs; worn as the fabric of hard honest work, and as the expression of angry rebellion; used for the sails of Columbus’ ships in legend; and worn by American cowboys in fact. Legend and fact are also interwoven when scholars discuss the origin of the name denim itself. Most reference books say that denim is an English corruption of the French “serge de Nimes;” a serge fabric from the town of Nimes in France. However, some scholars have begun to question this tradition. There are a few schools of thought with regard to the derivation of the word “denim.” Pascale Gorguet-Ballesteros, Gorguet-Ballesteros, of the Musee de la Mode et du Costume in Paris, has done some interesting research on both of these issues. A fabric called “serge de Nimes,” was known in France prior to the 17th century. At the same time, there was also a fabric known in France as “nim.” Both fabrics were composed partly of wool. Serge de Nimes was also known in England before the end of the 17th century. The question then arises: is this fabric imported from France or is it an English fabric bearing the same name? According to Ms. Gorguet-
Ballesteros, fabrics which were named for a certain geographic location were often also made elsewhere; the name was used to lend a certain cachet to the fabric when it was offered for sale. Therefore a “serge de Nimes” purchased in England was very likely also made in England, and not in Nimes, France. There still remains the question of how the word “denim” is popularly thought to be descended from the word “serge de Nimes.” Serge de Nimes was made of silk and wool, but denim has always been made of cotton. Is the real origin of the word denim “serge de nim,” meaning a fabric that resembled the part-wool fabric called nim? Was serge de Nimes more wellknown, and was this word mis-translated when it crossed the English Channel? Or, did British merchants decide to give a zippy French name to an English fabric to give it a bit more cachet? To confuse things even more, there also existed, at the same time, another fabric known as “jean”. Research on this textile indicates that it was fustian – cotton, linen and/or wool blend - and that the fustian of Genoa, Italy was called jean; here we do see evidence of a fabric being named from a place of origin. It was apparently quite popular, and imported into England in large quantities during the 16th century. By the end of this period jean was being produced in Lancashire. By the 18th century jean cloth was made completely of cotton, and used to make men’s clothing, valued especially for its property of durability even after many washings. Denim’s popularity was also on the rise. It was stronger and more expensive than jean, and though the two fabrics were very similar in other ways, they did have one major difference: denim was made of and one white thread; jean was woven of two threads of the same colour. Moving across the Atlantic, we find American textile mills starting on a small scale at this same time, the late 18th century, mostly as a way to become independent from foreign producers (mainly the English). From the very beginning, cotton fabrics were an important component of their product line. A factory in the state of Massachusetts wove both denim and jean. President George Washington toured this mill in 1789 and was shown the machinery which wove denim, which had both warp and fill of cotton. One of the first printed references to the word “denim” in the US was seen in this same year: a Rhode Island newspaper reported on the local production of denim (among other fabrics). The book The Weavers Draft Book and
Clothiers Assistant, published in 1792, contains technical sketches of the weaving methods for a variety of denims. In 1864, an East Coast wholesale house advertised that it carried 10 different kinds of denim, including “New Creek Blues” and “Madison River Browns”. Webster’s Dictionary of the same year contained the word “denim,” referring to it as “a coarse cotton drilling used for overalls, etc.” Research shows that jean and denim were two very different fabrics in the 19th century America. They also differed in how they were used. In 1849 a New York clothing manufacturer advertised topcoats, vests or short jackets in chestnut, olive, black, white and blue jean. Fine trousers were offered in blue jean; overalls and trousers made for work were offered in blue and fancy denim. Other American advertisements show working men wearing clothing that illustrate this difference in usage between jean and denim. Mechanics and painters wore overalls made of blue denim; working men in general (including those not engaged in manual labour) wore more trousers made of jean. Denim, then, seems to have been reserved for work clothes, when both durability and comfort were needed. Jean was a work wear fabric in general, without the added benefits of denim. In Staple Cotton Fabrics by John Hoye, published in 1942, jean is listed as a cotton serge with warp and woof of the same color, used for overalls, work and sport shirts, doctors and nurses uniforms and as linings for boots and shoes. Of denim, Hoye says, “The most important fabric of the work-clothing group is denim. Denims are strong and serviceable; they are particularly strong in the warp direction, where the fabric is subjected to greater wear than the filling.” Levi’s jeans, of course, are named for the founder of the company that makes them. A lot of people over the years have thought that Levi Strauss & Co. was started by a Mr. Levi and a Mr. Strauss; or even by the French philosopher/anthropologist philosopher/anthropologist Claude Levi-Strauss. The truth is, the company was founded by a man born as “Loeb” Strauss in Bavaria in 1829. He, his mother and two sisters left Germany in 1847 and sailed to New York, where Loeb’s half-brothers were in business selling wholesale dry goods (bolts of cloth, linens, clothing, etc.). For a few years, young Loeb Strauss worked for his brothers, and in 1853 obtained his American citizenship. In that same year, he decided to make a new start and undertake the hazardous journey to San Francisco, a city enjoying the benefits of the recent Gold Rush. At age 23, Loeb either decided to go into the dry goods business for himself
(perhaps thinking that the easiest way to make money during a Gold Rush was to sell supplies to miners), or he was sent there by his brothers, in order to open the West Coast branch of the family business. No matter what the reason, San Francisco was the kind of city where people went to reinvent themselves and their lives, and this proved to be true for Loeb, who changed his name to “Levi” sometime around 1850, - for which we should be grateful, or else today we would all be wearing “Loeb’s Jeans.” Levi Strauss was a wholesale dry goods merchant beginning with his arrival in San Francisco in 1853. He sold the common dry goods products, including clothing whose manufacturers are unfortunately unknown to us. Levi worked hard, and acquired a reputation for quality products over the next two decades. In 1872 he got a letter from tailor Jacob Davis, who had been making riveted clothing for the miners in the Reno area and who purchased cloth from Levi Strauss & Co. He needed a business partner to help him get a patent and begin to manufacture this new type of work clothing. Well, Levi knew a good business opportunity when he saw one, and in 1873 LS&CO. and Davis received a patent for an “Improvement in Fastening Pocket-Openings.” Pocket-Openings.” As soon as the two men got their manufacturing facility under way, they began to make copper riveted “waist overalls” (which is the old name for jeans) out of a brown cotton duck, and a blue denim. It’s likely that a pair of these duck pants (which survived the 1906 fire) confused early historians of the company, as duck looks and feels like canvas. The T he denim, however, was true blue. Of course, Levi did not dye any brown fabric blue, as the myth has proclaimed, nor did he purchase it from Nimes. Knowing that the riveted pants were going to be perfect for work wear, it’s likely he decided to make them out of denim rather than jean for the reasons mentioned earlier: denim was what you used when you needed a very sturdy fabric for clothing to be worn by men doing manual labour. The denim for the first waist overalls came from the Amoskeag Manufacturing Company in Manchester, New Hampshire, on the East Coast of the United States. This area, known as New England, was the site of the first American textile mills, and by 1873 their fabrics were well-known and well-made. Amoskeag was incorporated in 1831 and their denim production dated to the mid-1860s (this being the time of the American Civil War, the company also manufactured guns for a few years).
In 1914 an article about the association between LS&CO. and Amoskeag appeared in the mill’s own newspaper. It read in part, “In spite of the many cheaper grades offered in competition, the sale of the Amoskeag denim garment has kept up due in part to the superior denim used in its construction and in part to superior workmanship such as sewing with linen thread, etc. Doubtless the Amoskeag denim has contributed in no small degree to the success of Levi Strauss & Co. and, in return, that concern has contributed in an equal degree to the success of Amoskeag denims, advertising as it does, their superiority over all other denims.” At Levi Strauss & Co., the duck and denim waist overalls were proving to be the success that Jacob Davis had predicted. Levi Strauss was now the head of both a dry goods wholesaling and garment manufacturing business. In addition to the waist overalls, the company made jackets and other outer wear out of denim and duck; they also branched out into shirts of plain or printed muslin. Levi Strauss died in 1902, at the age of 73. He left his thriving business to his four nephews - Jacob, Louis, Abraham and Sigmund Stern - who helped rebuild the company after the disaster of 1906. The earliest surviving catalog in the Archives shows a wonderful variety of denim products for sale. Within a few years, it became obvious to the Stern brothers that they needed a new source of denim. Near the end of the 19th century Amoskeag and other New England mills had begun to experience a slow decline, due to competition from mills in the southern states, higher labour and transportation costs, outdated buildings and equipment and high taxes. The demand for waist overalls was so great that LS&CO. needed a more reliable method of obtaining the fabric they needed. Interestingly, by around 1911 the company had stopped making garments out of cotton duck. It’s possible that this was due to customer preference: once someone had worn a pair of denim pants, experiencing its strength and comfort - and how the denim became more comfortable with every washing - he never wanted to wear duck again; because with cotton duck, you always feel like you’re wearing a tent. By 1915 the company was buying the majority of its denim from Cone Mills, in North Carolina (by 1922 all the denim came from Cone). Founded in 1891, it was the center of denim production in America by the turn of the
century. Cone developed the denim which brought Levi’s jeans their greatest fame during the following decades. By the 1920s, Levi’s waist overalls were the leading product in men’s work pants in the Western states. Enter the 1930s - when Western movies and the West in general captured the American imagination. Authentic cowboys wearing Levi’s jeans were elevated to mythic status, and Western clothing became synonymous with a life of independence and rugged individualism. Denim was now associated less often with labourers in general, and more as the fabric of the authentic American as symbolized by John Wayne, Gary Cooper and others. LS&CO. advertising did its part to fuel this craze, using the West’s historic preference for denim clothing to advertise Levi’s waist overalls. Easterners who wanted an authentic cowboy experience headed to the dude ranches of California, Arizona, Nevada and other states, where they purchased their first pair of Levi’s (the products were still only sold West of the Mississippi). They took these garments home to wow their friends and help spread the Western influence to the rest of the country, and even overseas. The 1940s, wartime. American G.I.s took their favourite pairs of denim pants overseas; guarding them against the inevitable theft of valuable items. Back in the States, production of waist overalls went down as the raw materials were needed for the war effort. When the war was over, massive changes in society signalled the end of one era and the beginning of another. Denim pants became less associated with work wear and more associated with the leisure activities of prosperous post-war America. Levi Strauss & Co. began selling its products nationally for the first time in the 1950s. Easterners and Midwesterners finally got the chance to wear real Levi’s jeans, as opposed to the products made by other manufacturers over the years. This led to many changes, within the company and on the products. Zippers were used in the classic waist overalls for the first time in 1954. This was in response to complaints from non-Westerners non-Westerners who didn’t like the button fly (the jeans they were used to wearing had zippers). Some things took longer to change. One of them was the attitude that denim clothing was appropriate only for hard, physical labour. This was dramatically demonstrated to LS&CO. in 1951. Singer Bing Crosby was
very fond of Levi’s jeans and was wearing his favourite pair while on a hunting trip to Canada with a friend in that year. The men tried to check into a Vancouver hotel, but because they were wearing denim, the desk clerk would not give them a room; apparently denim-clad visitors were not considered high-class enough for this hotel. Because the men were wearing Levi’s jeans, the clerk did not even bother to look past their clothing to see that he was turning away America’s most beloved singer (luckily for Bing, he was finally recognized by the bellhop). The 1950s brought great acclaim to Levi’s jeans and denim pants in general. Events in this decade also led the company to change the name of its most popular product. Until the 1950s we referred to the famous copper riveted pants as “overalls;” when you went into a small clothing store and asked for a pair of overalls, you were given a pair of Levi’s. However, after World War II our customer base changed dramatically, as referred to earlier: from working adult men, to leisure-loving teenage boys and their older collegeage brothers. These guys called the product “jeans” - and by 1960 LS&CO. decided that it was time to adopt the name, since these new, young consumers had adopted our products. From the 1950s to the present, denim and jeans have been associated with youth, with new ideas, with rebellion, with individuality. Beginning in the late 1950s, Levi Strauss & Co. began to look at opportunities for expansion outside of the United States. During and after World War II, people in Japan, England and Germany saw Levi’s jeans for the first time, as they were worn by U.S. soldiers during their off-duty hours. There are letters in the company Archives from people who traded leather jackets and other clothing items to American G.I.s for their Levi’s jeans, and wrote to the company asking how they could get another pair. Word began to spread via individual customers, and American magazines which made their way overseas. Letters came to us from places as diverse as Thailand, England and Pitcairn Island in the South Pacific, written by people begging us to send them a pair of the famous jeans. British teenagers would swarm the docks when American Merchant Marine ships came into port, and buy the Levi’s jeans off the men before they even had time to set foot on dry land. By the late 1960s, the trickle of jeans into Europe and Asia had become a flood. Denim was poised to re-enter the continent which had given it birth, and it would be adopted with an enthusiasm shown to few other American products. Indeed, despite its European origins, denim was considered the
quintessential American fabric, beginning even in the mid-1960s, when jeans were still a new commodity in Europe. By the 1970s, these “play clothes” tended toward the flared and bell bottom silhouette. At the same time, new fabrics were used for products that had traditionally been made out of denim. The product line of Levi Strauss & Co. was no exception. “Blue Levi’s” were still a staple of the company’s collection, but a glimpse at sales catalogs will reveal that customers also wanted plaid, polyester, no-wrinkle flares with matching vests. Even in the 1970s, when it seemed that denim was being pushed aside in favour of these other fabrics, writers, manufacturers, and marketing executives worked hard to keep denim in the public eye. By the mid to late 1970s the craze for double-knits and other like fabrics began to slow. At the same time, marketing reports in various trade magazines showed an upward surge in the popularity of denim, as seen in the number of denim-clad models in print and television advertising.
LEVI STRAUSS
Levi Strauss, the inventor of the quintessential American garment - the blue jean -was born in Buttenheim, Bavaria on February 26, 1829 to Hirsch Strauss and his second wife, Rebecca Haas Strauss. Levi - named "Loeb" at
birth – had three older brothers and three older sisters, but his sister Fanny (born Vogele) was the only other child of his mother, Rebecca. Hirsch succumbed to tuberculosis in 1845 and two years later Rebecca, Levi, Fanny, and the next oldest sister Maila immigrated to New York. There, they were met by Jonas and Louis, two of the older brothers, who had already made the journey and had started a wholesale dry goods business, called “J. Strauss Brother & Co.” Young Loeb soon began to learn the trade himself, and by 1850 he was known among his family and customers as “Levi” (in the census of that year, his name is spelled “Levy.”). When news of the California Gold Rush made its way east, Levi immigrated to San Francisco to make his fortune, though he knew he wouldn’t make it panning gold. At the end of January 1853 he became an American citizen, and in February he headed for the West coast via the Isthmus of Panama. He arrived in bustling, noisy San Francisco in early March, establishing a wholesale dry goods business under his own name and also serving as the West Coast representative of the family’s New York firm. His new company imported dry goods – clothing, underwear, umbrellas, handkerchiefs, bolts of fabric – and sold them to the small stores that were springing up all over California and the West. It was these stores that helped outfit the miners of the Gold Rush and, eventually, the new families that began to populate the western regions. The first address where Levi conducted business (that we know of) was at 90 Sacramento Street, and the name of his firm was simply, “Levi Strauss.” In the 1850s this location was very close to the waterfront, handy for receiving and selling the goods that arrived by ship from his brother Jonas in New York. In 1856 Levi moved the business to 62 Sacramento Street and then to 63 & 65 Sacramento as its trade and reputation expanded. By this time David Stern - who was married to Levi’s sister Fanny - was associated with the firm. In 1861 the business relocated to 317 & 317 Sacramento Street, and in 1863 the company was renamed “Levi Strauss & Co.” Then in 1866 Levi moved the headquarters again, to larger quarters at 14-16 Battery Street, where it remained for the next forty years. In his mid-thirties, Levi was already a well-known figure around the city. He was active in the business and cultural life of San Francisco, and actively supported the Jewish community, including Temple Emanu-El, the city's
first synagogue. Despite his stature as an important business man, he insisted that his employees call him Levi, and not Mr. Strauss. In 1872, Levi received a letter from Jacob Davis, a Reno, Nevada tailor. Davis was one of Levi Strauss’ regular customers; he purchased bolts of cloth from the company to use for his own business. In his letter, he told the prosperous merchant about the interesting way he made pants for his customers: he placed metal rivets at the points of strain - pocket corners, and at the base of the button fly. He did this in order to make the pants stronger for the labouring men who were his customers. He wanted to patent this new idea but needed a business partner to get the idea off the ground. So he suggested that the two men take out the patent together (sharing the costs, as well). Levi was enthusiastic about the idea and the patent was granted to both men on May 20, 1873. The blue jean was born. He knew that demand would be great for these riveted "waist overalls" (the old name for jeans), so Levi brought Jacob Davis to San Francisco to oversee the first West Coast manufacturing facility. It’s possible that the first manufacture of the jeans was undertaken by individual seamstresses who worked out of their homes. By the 1880s Levi had leased factory space and then opened his own factory south of Market Street (though the dates and information are a bit vague here, thanks to the loss of the company’s historical records in the 1906 earthquake and fire). The famous 501 jean – known at the time simply as “XX” – was soon a best seller, as were the other riveted products Levi and Jacob added to their new manufactured lines. Levi carried on other business pursuits during his career, as well. He became a charter member and treasurer of the San Francisco Board of Trade in 1877. He was a director of the Nevada Bank, the Liverpool, London and Globe Insurance Company and the San Francisco Gas and Electric Company. In 1875 Levi and two associates purchased the Mission and Pacific Woolen Mills from the estate of former silver millionaire William Ralston, and the mill's fabric was used to make the Levi Strauss & Co. "blanket-lined" pants and coats. He was also one of the city’s greatest philanthropists. Levi was a contributor to the Pacific Hebrew Orphan Asylum and Home, the Eureka Benevolent Society and the Hebrew Board of Relief. In 1895 he and a number of other prominent San Franciscans provided funds to build anew railroad from San Francisco to the San Joaquin Valley (a project which unfortunately failed).
And in 1897 Levi provided the funds for twenty-eight scholarships at the University of California, Berkeley. As the end of the 19th century approached, Levi was still involved in the dayto-day workings of the business, though he had brought his nephews into the firm by this time. David Stern had died in 1874 and his four sons - Jacob, Sigmund, Louis and Abraham – were now working with their uncle Levi. In 1890 - the year that the XX waist overall was given the lot number "501" Levi and his nephews officially incorporated the company. During the week of September 22, 1902 Levi began to complain of ill health but by Friday evening the 26th, he felt well enough to attend the family dinner at the home on Leavenworth Street which he shared with Jacob Stern’s family. He awakened briefly in the night, and told the nurse in attendance that he felt "as comfortable as I can under the circumstances.” Then, peacefully, he died. Levi's estate amounted to nearly $ 6 billion, the bulk of which was left to his four nephews and other family members. Other bequests were made to the Pacific Hebrew Orphan Asylum, the Home for Aged Israelites, the Roman Catholic and Protestant Orphan Asylums, Eureka Benevolent Society and the Emanu-El Sisterhood.
THE INVENTION OF LEVI’S JEANS May 20, 2010 marked the 137th anniversary of an historic event: the day that Levi Strauss and Jacob Davis obtained a U.S. patent on the process of putting rivets in men’s work pants for the very first time. In other words, it’s the birthday of the blue jean. So how did jeans get invented? It’s really a simple story. Levi L evi Strauss was a dry goods merchant, who came to San Francisco in 1853 at the age of twenty-four to open a west coast branch of his brothers’ dry goods business. He had spent a number of years learning the trade in New York after emigrating there from his native Germany. He built his business into a very successful operation over the succeeding twenty years, making a name for
himself not only as a well-respected businessman, but as a local philanthropist as well. One of Levi’s many customers was a man named Jacob Davis. Originally from Latvia, he made his living as a tailor in Reno, Nevada. He regularly purchased bolts of cloth from the wholesale house of Levi Strauss & Co. Among Jacob’s customers was a difficult man who kept ripping the pockets of the pants that were made for him. Jacob tried to think of a way to strengthen his trousers, and one day hit upon the idea of putting metal rivets at points of strain: pocket corners, base of the button fly, etc. These riveted pants were an instant hit with everyone, and Jacob began to get worried that someone might steal this great idea. So, he decided to take out a patent on the process, but had trouble scraping together the $68 he needed to file the papers. What he needed was a business partner, and he immediately thought of Levi Strauss. He wrote to Levi to suggest that the two men hold the patent together. Levi, being an astute businessman, saw the potential for this new product, and agreed to Jacob’s proposal. The two men received patent #139,121 from the U.S. Patent and Trademark Office on May 20, 1873. Soon the first riveted clothing was made and sold. Jacob Davis was in charge of manufacturing once the company opened its two San Francisco factories. The denim for the riveted work pants came from the Amoskeag Mill in Manchester, New Hampshire, a company known for the quality of its fabrics. By the way, “waist overalls” was the usual name for work trousers and that’s what these first jeans were called. This is because the early pants were designed to literally be worn “over” your street clothes; kind of like protective work gear. After 1900 they were just called overalls and people began to wear them like regular pants. Holding a patent on this process meant that Levi Strauss & Co. was the only company allowed to make riveted clothing until the patent went into the public domain. This happened in 1890, which means that from 1873 until 1890 the only riveted clothing in the world was made by LS&CO., and an entire generation of people grew up with this knowledge.
Levi Strauss & Co. Type Industry Founded Founder(s)
Private Clothing 1853 Levi Strauss
Headquarte Headquarters rs San Francis Francisco, co, Califo California, rnia, U.S. U.S. Area ser served Worldwide
Key people
Robert A. "Bob" Eckert, Chairman of the Board John R. Anderson, President and CEO
Products Revenue Owner(s) Employees
Jeans US$ 4.303 billion Descendants of of Le Levi St Strauss 11,400
Divisions
Lev Levi's, Do Dockers, Si Signature by by Levi Strauss & Co.
Website
www.levistrauss.com
Levi Strauss & Co. (LS&CO) is a privately held clothing company known worldwide for its Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Franconia, (Kingdom of Bavaria) to San Francisco, California to open a west coast branch of his brothers' New York dry goods business. Levi Strauss & Co is one of the world's largest brand-name apparel marketers with sales in more than 110 countries. There is no other company with a comparable global presence in the jeans and casual pants markets. Today, the Levi's trademark is one of the most recognized in the world and is registered in more than 160 countries. The company is privately held by descendants of the family of Levi Strauss. Shares of company stock are not publicly traded. Although the company began producing denim overalls in the 1870s, modern jeans were not produced until the 1920s. The company briefly experimented (in the 1970s) with employee ownership and a public stock listing, but remains owned and controlled by descendants and relatives of Levi Strauss' four nephews.
Organization Levi Strauss & Co. is a worldwide corporation corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific Division (APD), based in Singapore. The company employs a staff of approximately 10,500 people worldwide, and owns and develops a few brands. Levi's, the main brand, was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion. From the early 1960s through the mid 1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 1960s and 1970s ushered in the "blue jeans craze" and served as a catalyst for the brand. Levi's, under the leadership of Jay Walter Haas Sr., Peter Haas Sr., Paul Glasco and George P. Simpkins Sr., expanded the firm's clothing line by adding new fashions and models, including stone-washed jeans through the acquisition of Great Western Garment Co. (GWG), a Canadian clothing manufacturer. GWG was responsible for the introduction of the modern "stone washing" technique, still in use by Levi Strauss.
Mr. Simpkins is credited with the company's record paced expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants in the United States from 1964 through 1974. Perhaps most impressive, however, was Levi's expansion under Simpkins was accomplished without a single unionized employee as a result of Levi's and the Haas families strong stance on human rights and Simpkins' use of "pay for performance" manufacturing at the sewing machine operator level up. As a result, Levi's plants were perhaps the highest performing, best organized and cleanest textile facilities of their time. Levi's even piped in massive amounts of air conditioning for the comfort of Levi's workers into its press plants, which were known in the industry to be notoriously hot. 2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down. The Dockers brand, launched in 1986 which is sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Dockers were introduced into Europe in 1993. Levi Strauss attempted to sell the Dockers division in 2004 to relieve part of the company's $2 billion outstanding debt. Launched in 2003, Levi Strauss Signature features jeans wear and casual wear. In November 2007, Levi's released a mobile phone in co-operation with ModeLabs. Many of the phone's cosmetic attributes are customisable at the point of purchase.
History Jacob Davis was a tailor who frequently purchased bolts of cloth made from hemp from Levi Strauss & Co.'s wholesale house. After one of Davis customers kept purchasing cloth to reinforce torn pants, he had an idea to use copper rivets to reinforce the points of strain, such as on the pocket corners and at the base of the button fly. Davis did not have the required money to purchase a patent, so he wrote to Strauss suggesting that they go into business together. After Levi accepted Jacob's offer, on May 20, 1873, the two men received U.S. Patent 139,121 from the United States Patent and Trademark Office. The patented rivet was later incorporated into the company's jean design and advertisements. Contrary to an advertising campaign suggesting that Levi Strauss sold his first jeans to gold miners
during the California Gold Rush (which peaked in 1849), the manufacturing of denim overalls only began in the 1870s. Levi Strauss started the business at the 90 Sacramento Street address in San Francisco. He next moved the location to 62 Sacramento Street then 63 & 65 Sacramento Street. By changing the location of the store the company began to become more successful. Modern jeans began to appear in the 1920s, but sales were largely confined to the working people of the western United States, such as cowboys, lumberjacks, and railroad workers. Levi’s jeans apparently were first introduced to the East during the dude ranch craze of the 1930s, when vacationing Easterners returned home with tales (and usually examples) of the hard-wearing pants with rivets. Another boost came in World War II, when blue jeans were declared an essential commodity and were sold only to people engaged in defense work. From a company with fifteen salespeople, two plants, and almost no business east of the Mississippi in 1946, the organization grew in thirty years to include a sales force of more than 22,000, with 50 plants and offices in 35 countries. In the 1950s and 1960s, Levi's jeans became popular among a wide range of youth subcultures, including greasers, mods, rockers, hippies and skinheads. Levi's popular shrink-to-fit 501s were sold in a unique sizing arrangement; the indicated size referred to the size of the jeans prior to shrinking, and the shrinkage was substantial. The company still produces these unshrunk, uniquely sized jeans, and they are still Levi's number one selling product. Although popular lore (abetted by company marketing) holds that the original design remains unaltered, this is not the case: the company's president got too close to a campfire, and the rivet at the bottom of the crotch conducted the fire's heat too well; the offending rivet, which is depicted in old advertisements, was removed.
1990s and later By the 1990s, the brand was facing competition from other brands and cheaper products from overseas, and began accelerating the pace of its US factory closures and its use of offshore subcontracting agreements. In 1991, Levi Strauss faced a scandal involving six subsidiary factories on the Northern Mariana Islands, a U.S. commonwealth, where some 3% of Levi's
jeans sold annually with the Made in the USA label were shown to have been made by Chinese laborers under what the United States Department of Labor called "slave like" conditions. Today, Levi's jeans are made overseas. Cited for sub-minimum wages, seven-day work weeks with 12-hour shifts, poor living conditions and other indignities, Tan Holdings Corporation, Levi Strauss' Marianas subcontractor, paid what were then the largest fines in U.S. labor history, distributing more than $9 million in restitution to some 1,200 employees. Levi Strauss claimed no knowledge of the offenses, then severed ties to the Tan family and instituted labor reforms and inspection practices in its offshore facilities. The activist group Fuerza Unida (United Force) was formed following the January 1990 closure of a plant in San Antonio, Texas, in which 1,150 seamstresses, some of whom had worked for Levi Strauss for decades, saw their jobs exported to Costa Rica. During the mid- and late-1990s, Fuerza Unida picketed the Levi Strauss headquarters in San Francisco and staged hunger strikes and sit-ins in protest of the company's labor policies. The company took on multi-billion dollar debt in February 1996 to help finance a series of leveraged stock buyouts among family members. Shares in Levi Strauss stock are not publicly traded; the firm is today owned almost entirely by indirect descendants and relatives of Levi Strauss, whose four nephews inherited the San Francisco dry goods firm after their uncle's death in 1902. The corporation's bonds are traded publicly, as are shares of the company's Japanese affiliate, Levi Strauss Japan K.K. In June 1996, the company offered to pay its workers an unusual dividend of up to $750 million in six years' time, having halted an employee stock plan at the time of the internal family buyout. However, the company failed to make cash flow targets, and no worker dividends were paid. In 2002, Levi Strauss began a close business collaboration with Wal-Mart, producing a special line of "Signature" jeans and other clothes for exclusive sale in WalMart stores until 2006. Levi Strauss Signature jeans can now be purchased at several stores in the US, Canada, India and Japan. According to the New York Times, Levi Strauss leads the apparel industry in trademark infringement cases, filing nearly 100 lawsuits against competitors since 2001. Most cases center on the alleged imitation of Levi's back pocket double arc stitching pattern (U.S. trademark #1,139,254), which Levi filed for trademark in 1978. Levi's has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies.
By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years. Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s. After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007. In 2009, it was noted in the media for selling Jeans on interest-free credit, due to the Global Recession.
HISTORY OF THE LEVI’S 501 JEANS 1853 Levi Strauss arrives in San Francisco and opens a wholesale dry goods business, selling clothing, blankets, handkerchiefs, etc. to small general stores throughout the American West.
1872 Jacob Davis, a Reno Nevada tailor, writes to Levi Strauss, telling him about the process he invented to rivet the pocket corners on men’s pants to make them stronger. He suggests the two men take out a patent on the process together and Levi agrees.
1873 Levi Strauss & Jacob Davis are granted a patent on the process of riveting pants by the U.S. Patent and Trademark Office on May 20. It is patent number 139,121 and this is the invention of the blue jean. The pants called “waist overalls” - have one back pocket with the Arcuate stitching design, a watch pocket, a cinch, suspender buttons and a rivet in the crotch.
1886 The Two Horse brand leather patch is first used on the waist overalls. Its purpose was to demonstrate the strength of the pants and reinforce our status as the originator of patent riveted clothing.
c1890 The rivet patent goes into the public domain, so that Levi Strauss & Co. is not longer the exclusive manufacturer of riveted clothing. Lot numbers are first assigned to the products being manufactured.
c1901 The pants – now just called “overalls” - had two back pockets. Added this additional pocket due to consumer requests or changes in men’s fashions at the time.
1902 Levi Strauss dies at the age of 73. His nephews take over the business; their descendants still run the company today.
1906 The San Francisco earthquake and fire destroys the headquarters and factories of Levi Strauss & Co. A new factory is built at 250 Valencia Street in San Francisco and opens in November.
1910s Sometime during this decade the jeans are sewn with a felled inseam. Prior to this time the inseam was “mock” felled.
1915 The overalls win a “Highest Award” at the Panama-Pacific International Exposition in San Francisco. LS&CO. begins to buy denim from Cone Mills in Greebsboro, North Carolina.
1922 Belt loops are added to the overalls, but the suspender buttons are still retained. The cinch is also still used on the pants, but some men cut if off in order to wear the overalls with a belt. Again, the addition of belt loops was in response to changes in men’s fashions and our understanding of what consumers wanted. LS&CO. now buys its denim exclusively from Cone Mills.
c1927 Cone Mills develops the 10 oz. red selvage denim exclusively for the 501 jeans. The denim is woven in 29” wide looms.
1936 The red Tab is first placed onto the right back pocket of the overalls. The word “Levi’s is stitched in white in all capital letters on one side only. The Tab is created to differentiate Levi’s overalls from the many competitors in the marketplace who were using dark denim and an Arcuate stitch.
1937 The back pockets on the overalls are sewn so that they cover the rivets. This is in response to consumers who complained that the rivets scratched furniture and saddles. The suspender buttons are removed from the
overalls. Consumers are given snap-on buttons in case they still want to wear suspenders.
World War II Changes are made to the overalls in order to conform to rules set by the War Production Board for the conservation of raw materials. The crotch rivet, watch pocket rivets and back cinch are removed to save fabric and metal. The Arcuate stitching design is removed as the thread is decorative only and not vital to the usefulness of the garment. In order to keep the design on the pants, LS&CO. sewing machine operators paint it on each pair.
1943 The Arcuate stitching design is registered as a trademark. c1947 The post-war version of the 501 jeans starts coming off the production line. The cinch is gone forever, the rivets are put back on the watch pocket and the Arcuate is now stitched with a double-needle machine which gives it the “diamond” shape at the point where the two lines of stitching meet. This creates the uniform look of the Arcuate, which is in contrast to previous years, when the single needle application gave each Arcuate design a unique appearance, depending on the skill of the operator.
Early 1950s The word LEVI’S is now stitched on both sides of the red Tab. We are not sure why this was done.
Late 1950s The leather patch is replaced by a Two Horse patch made of heavy-duty card stock, known as the “leather like.” This is due to the fact that the company was selling products nationally, and it was becoming more expensive to use real leather. Also, the newer automatic washing machines were very hard on the real thing.
1954 A zippered version of the overalls is introduced and named 501Z. This was introduced as we had begun selling our products on the East Coast of the United States and many people were unfamiliar with the button fly.
1960 The word “overalls” is replaced by the word “jeans” in advertising and on packaging.
c1961 Pre-shrunk Levi’s jeans are introduced.
1964 The jeans become part of the permanent collections of the Smithsonian Institution in Washington, D.C.
1966 The first television commercial for Levi’s jeans is aired. The rivets are removed from the back pockets and replaced with bar tacking. This is due to the fact that the strong rivets eventually wore through the denim, exposing them and causing the problems that led to their being covered back in 1937: scratching furniture.
1971 The word “Levi’s on the red Tab device is now stitched in white with a capital “L” only; the “E” looks like it changed, leading to the vintage clothing concept of “Big E” and “little e.” This was done to conform to the company’s new house mark – the “batwing” – which was adopted in 1967 and in which the word “Levi’s” is meant to be the proper name of our founder, Levi Strauss.
1981 501 jeans for women are introduced, with the airing of the famous “Travis” television commercial.
1983 Cone Mills begins to introduce XXX denim through the use of 60” wide looms.
1984 The renowned “501 Blues” television advertising campaign is launched at the summer Olympic Games in Los Angeles.
1985 LS&CO. wins the Governor’s Committee Media/Advertising Media/Advertising Award from the New York State Office of Advocates for the Disabled, for its positive portrayals of disabled people in the “501 Blues” television ads.
1986 The first in a series of innovative television commercials commercials for the jeans airs in Europe. These commercials feature classic American rock music mixed with nostalgia and romance.
1992 Due to the interest in “vintage” Levi’s jeans on the part of consumers worldwide, LS&CO. introduces introduces the “Capital E” jean in the United States. This also follows on the success of the vintage model created earlier by Levi Strauss Japan.
1993 Levi Strauss & Co. sponsors the “Send Them Home Search,” a contest to find the oldest pair of Levi’s jeans in the United States. The winning pair dates to the late 1920s.
1996 Building on the success of the Capital E product, a new series of vintage reproductions - called the Levi’s Vintage Clothing line - is introduced in stores worldwide.
1997 LS&CO. buys a pair of c1890 jeans for $25,000. 1998 The Levi’s 501 jeans celebrate 125 years of originality. 2003 LS&CO. celebrates the 130th anniversary of the invention of the blue jean.
Advertising Levi's marketing style has often made use of old recordings of popular music in television commercials, ranging from traditional pop to punk rock. Notable examples include Ben E King ("Stand By Me"), Percy Sledge ("When a Man Loves a Woman"), Eddie Cochran ("C'mon Everybody!"), Marc Bolan ("20th Century Boy"), Screamin' Jay Hawkins ("Heart Attack & Vine"), The Clash ("Should I Stay or Should I Go?"), as well as lesser known material, such as "Falling Elevators" by MC 900 Ft. Jesus and "Flat Beat" and "Monday Massacre" by Mr. Oizo. Many of these songs were re-released by their record labels as a tie-in with the ad campaigns, resulting in increased popularity and sales of the recordings and the creation of iconic visual associations with the music, such as the use of a topless male model wearing jeans underwater in the 1992 adverts featuring "Wonderful World" World" and "Mad about the Boy" and the puppet, Flat Eric, in the ads featuring music by Mr. Oizo.
LEVI ’S: AIMIN A IMING G AT THE ECHO EC HO BOOMERS BOOM ERS In 1986, Levi Strauss & Company found that the best way to stay true blue to its customers was to change its colors. Riding high on the results of a recent “back to basis” campaign with its flagship 501 brand, Levi's was enjoying reinvigorated jeans sales. But the good news was followed by bad. Research showed that baby boomers, the core of the company's customer franchise, were buying only one or two pairs of jeans annually, compared to the four to five pairs purchased each year by 15 to 24-year-olds. Born between 1946 and 1964, the baby boomers had adopted jeans as a symbol of their break with the tastes and traditions of their parents. They had, in the words of Steve Goldstein, vice president of marketing and research for Levi's, helped turn the company into an “international global colossus” in the apparel industry. Now, however, the baby boomers were looking for something different. They still wanted clothing that was comfortable and made from natural fabrics, but fashion had become more important. Many worked in environments with relaxed dress codes, so they sought clothing that combined style and versatility—something versatility—something appropriate for both professional and leisure activities. “We set ourselves out to answer the big question,” Goldstein says. “How could we keep the baby boomer generation in Levi's brands when they weren't wearing so many pairs of Levi's jeans? And the answer was Dockers, something between the jean that they loved and the dress pants that their parents expected them to wear when they got their first job.” Dockers created a product category—new casuals. Blue denim was out; cotton khaki (in brown, green, black, and navy, but mostly traditional tan) was in. Positioned as more formal than jeans yet more casual than dress slacks, Docker's satisfied an unfulfilled need. They were the right pants for a variety of occasions, an unpretentious alternative to dressy, tailored slacks. The challenge in marketing Dockers was to leverage the Levi's name and heritage while establishing the independence of the new brand, and to do so without detracting from Levi's core jeans focus. According to Goldstein, the company briefly considered not using the Levi's name at all, but realized that this would be “sort of like trying to put a space shuttle up without any launch rockets.” So the original theme for Dockers was “Levi's 100 percent cotton Dockers. If you're not wearing Dockers, you're just wearing pants.”
Response from retailers and from the target market of 25- to 49-year-olds was everything Levi's hoped for. All the top menswear accounts across the country placed the new product in their stores, and in only five years, Dockers became a $1 billion brand. Brand awareness among men 25 and older was 98 percent, and 70 percent of target consumers had at least one pair of Dockers in their closets. With the new brand sailing along smoothly, Levi Strauss & Company began to dissociate Dockers from the company brand name. In 1993, the Levi's name and the words “since 1850” were removed from the Dockers logo. Robert Hanson, vice president of marketing and research for Dockers, claims the change was needed to “allow the Levi's brand to be focused on the core teen target because…it's the quintessential icon of youth culture.” Still following the baby boomer market, Levi's in 1996 brought out Slates, an extensive line of wool, polyester micro fiber, and fine-gauge cotton dress pants. “We thought there was room in a man's closet for a third brand,” says Jann Westfall, president of the Slates division. “That's why Slates was created to [fill the gap] between khakis and suits.” To Levi L evi Strauss & Company, it seemed a natural evolution—the guy who wore Levi's in the '70s and Dockers in the '80s would be ready for Slates in the '90s. Slates would be the high end of casual, neatly filling the “lunch with client/salary review with boss” role in the Docker man's wardrobe. Consumer research told Levi's that consumers found shopping for dress pants a chore: slacks departments were dreary; finding the right size was difficult; and getting alterations was frustrating. Consumers wanted cash and carry, off-the-rack dress pants. So Levi’s devised a carefully crafted strategy to overcome the typical male distaste for dress pants shopping. Slates were sold in scientifically tested selling areas consisting of mahogany-toned circular store displays that allowed easy access to the various styles and sizes. Levi's also responded with off-the-rack pants that require little altering. Whereas most dress pants come only in even waist sizes, forcing alterations for off-size men, Slates also come in odd sizes. All Slates are hemmed and cuffed and have double pleats in the front. For customers with larger waist sizes, the pleats are more kindly placed. Levi’s backed Slates with $20 million in advertising, beginning with television ads at the opening of the National Football League season. To charm potential customers, Levi’s agency designed ads such as one showing
a guy springing up from lunch with his partner to tango with his waitress. “The ads are stylish but they are not over [the market's] heads,” said Nancy Friedman, vice president of research and development. “The trick is to rein it back in so it isn't so chi-chi that people can't relate to it.” A year later, everyone agreed that Slates was a dynamite brand. Levi’s had turned on the Dockers customer to dress slacks just when “corporate casual” started to “dress up.” Noted one industry insider, “Slates and other labels have pushed the envelope. This has created tremendous consumer awareness for slacks in general.” Some retailers found that their tailored pants business was up 15 to 20 percent.
BRANDS The products of Levi Strauss & Co are sold under three brands:
1. Levi's: The Levi’s brand epitomizes classic American style and effortless cool and is positioned as the original and definitive jeans brand. Since their inception in 1873, Levis jeans have become one of the most recognizable garments in the world reflecting the aspirations and earning the loyalty of people for generations. Since their invention, Levi's jeans have become one of the most successful and widely recognized brands in the history of the apparel industry. Consumers around the world instantly recognize the distinctive traits of Levi’s jeans — the double arc of stitching, known as the Arcuate Stitching Design, and the red Tab Device, a fabric tab stitched into the back right pocket. Today, the Levi’s brand continues to evolve, driven by its distinctive pioneering and innovative spirit. The range of leading jeans wear and accessories for men, women and children is available in more than 110 countries, allowing individuals around the world to express their personal style.
The current Levi’s product range includes: Levi’s Red Tab Products These products are the foundation of the brand. They encompass a wide range of jeans and jeans wear offered in a variety of fits, fabrics, finishes, styles and price points intended to appeal to a broad spectrum of consumers. The line is anchored by the flagship 501» jean, the original and bestselling five-pocket jean in history The Red Tab line also incorporates a full range of jeans wear fits and styles designed specifically for women. Sales of Red Tab products represented the majority of Levi’s brand net sales in all three of our regions in fiscal years 2009, 2008 and 2007. Premium Products In addition to Levi’s Red Tab premium products available around the world, Levis offer an expanded range of high-end products. In 2009, we consolidated the management of our most premium Levi’s Jeans wear product lines under a new division based in Amsterdam. This division will oversee the marketing and development of two global product lines: existing Levi’s Vintage Clothing line, which showcases our most premium products by offering detailed replicas of our historical products, and Levi’s Made & Crafted, a recently-launched line of premium apparel. Levi’s brand products accounted for approximately 79%, 76% and 73% of our total net sales in fiscal 2009, 2008 and 2007, respectively, approximately half of which were generated in Americas region.
2. Dock Do cker erss: First introduced in 1986 as an alternative between jeans and dress pants, the Dockers brand is positioned as the khaki authority and aspires to be the world’s best and most-loved most-loved khakis. Dockers brand, which which pioneered the movement toward business casual, as led the U.S. khaki category, and is now available in numerous countries. The Dockers brand offers a full range of products rooted in the brand’s khaki heritage and appropriate for a wide-range of wearing occasions. Seeks to renew the appeal of the casual pant category by dealing up khakis’ masculinity and swagger and reminding men what they love about the essential khaki pant. This positioning is reflected in the “Wear the Pants” campaign launched globally in December 2009.
The brand also offers a complete range of khaki-inspired styles for women with products designed to flatter her figure and provide versatility for a wide range of wearing occasions. Dockers brand products accounted for approximately 16%, 18% and 21% of our total net sales in fiscal 2009, 2008 and 2007, respectively. Although the substantial majority of these net sales were in the Americas region, Dockers brand products are sold in more than 50 countries.
3. Levi Strauss Signature: In 2003 the launch of the Levi Strauss Signature brand, giving value consumers high-quality and fashionable clothing from a company on which the consumers trust. Levis seek to extend the style, authenticity and quality for which our company is recognized to more value conscious consumers through our Signature by Levi Strauss & Co. brand. Levis offer products under this brand name through the mass retail channel in the United States and Canada and value-oriented retailers and franchised stores in Asia Pacific. Levis use these distribution channels to reach consumers who seek access to high-quality, affordable and fashionable jeans wear from a company they trust. The product portfolio includes denim jeans, casual pants, tops and jackets in a variety of fits, fabrics and finishes for men, women and kids. Signature by Levi Strauss & Co. brand products accounted for approximately 5%, 6% and 6% of our total net sales in fiscal years 2009, 2008 and 2007, respectively. Although a substantial majority of these sales were in the United States, Signature by Levi Strauss & Co. brand products are sold in seven additional countries in our Americas and Asia Pacific regions.
DIVISIONS Levi Strauss & Co. is a worldwide corporation corporation organized into three geographic divisions:
1. Levi Strauss, North America (LSNA): Based in the San Francisco headquarters.
2. Levi Strauss Europe (LSE): Based in Brussels
3. Asia Pacific Division (APD): Based in Singapore Levi Strauss & Co.'s Asia Pacific Division is comprised of subsidiary businesses, licensees and distributors throughout Asia Pacific, Middle East, Africa and Latin America. The Division sources, manufactures and markets Levi's, Dockers, and Levi Strauss Signature products through 14 affiliates. The company employs approximately 2,500 talented people working together to ensure that the apparel brands are leaders in this part of the world. The division is comprised of wholly owned-and-operated businesses, licensees and distributors throughout Asia and the Pacific.
Leadership The worldwide leadership team, which includes the CEO and 11 executives, sets the company’s overall direction and is responsible for all major strategic, financial and operational decisions.
John Anderson (President & CEO)
John Anderson John Anderson is the President and Chief Executive Officer (CEO) of Levi Strauss & Co. (LS&Co.). LS&Co. is a leading global apparel company, with sales in more than 110 countries. John is an accomplished executive who has established a 30-year record of outstanding achievement at LS&Co. He has extensive general management experience with the Levi’s, Dockers and Signature by Levi Strauss & Co.™ brands' around the world and is a dynamic leader with wide-ranging expertise in merchandising, marketing and operations. John joined LS&Co. in 1979. Prior to his promotion to COO in July 2006, John was President of the company’s Asia Pacific Division (APD) and Global Sourcing Organization (GSO). During his nearly eight-year tenure as President of APD, net sales for the region more than doubled and the Levi’s, Dockers and Signature by Levi Strauss & Co. brand’s presence increased substantially throughout the region. As President of the GSO for two-and-ahalf years, John and his team turned the company’s sourcing operation into a competitive asset and continued to strengthen its responsible sourcing practices with suppliers around the world. John began his career with the company as a product manager in Australia. Between 1988 and 1995, he served as a merchandiser – first for the Levi’s brand in Europe and then for Menswear in the United States. He became Vice President of Merchandising and Product Development for the U.S.
Levi’s brand in 1995. He served as General Manager of Levi Strauss Canada and as President of Levi Strauss Canada and Latin America from 1996 to 1998. John also was the interim President of Levi Strauss Europe from September 2003 to February 2004. Prior to joining LS&Co., John held positions at Johnson & Johnson and the H.J. Heinz Company.
Foundations In 1897, our founder, Levi Strauss donated funds for scholarships — half of them for women — at the University of California at Berkeley. For more than 50 years, the Levi Strauss Foundation has actively promoted workers rights, the fight against HIV/AIDS and building assets to protect poor families and marginalized individuals. The Red Tab Foundation, started by Levi Strauss & Co, provides a financial safety net for any company employee or retiree in need. The Red Tab Foundation was founded in 1981 to assist current and past employees unable to pay for life’s basic needs due to financial emergencies. From emergency aid to financial literacy and asset building to scholarship programs, the Red Tab Foundation provides support to Levi Strauss & Co. employees, retirees and their families around the world.
Public Policy Worldwide government affairs affairs and public policy team takes an active role in advocating our position on concerns related to international trade, labor conditions, environmental sustainability and nondiscrimination through discussions with governments around the world. Also cultivate relationships with multilateral institutions such as the International Labor Organization (ILO), World Trade Organization and World Bank, and with nongovernmental organizations (NGOs), industry and trade associations, and other stakeholders.
Trade Marketing in 110 countries and producing in about 50 countries involves a very complex supply chain and a “spaghetti bowl” of trade programs. The organization support trade policies that enhance the free flow of our goods globally and remain consistent with our labor and environmental values.
Environment Working with global organizations, governments, partners and competitors to develop the next generation of apparel industry standards for energy, water, chemicals and materials usage — all with an eye to restoring the health of our planet.
Worker Rights Levi Strauss & Co. works closely with governments, nongovernmental organizations, industry associations and other stakeholders to strengthen implementation and enforcement of labor laws and workplace standards in countries where we have a business presence. To that end, Levi’s advocate for inclusion of worker rights provisions and enforcement measures in all bilateral, regional and multilateral trade agreements. Also leverage trade relationships and brand power to encourage the governments in the countries to strengthen and enforce their own labor laws, including policies that directly affect working conditions and worker rights. For example, along with other apparel companies, Levi’s had sent letters and engaged with the governments of Bangladesh, Cambodia and Mexico to help workers overcome legal and political obstacles to freedom of association and other civil liberties. To advance worker rights, we participate in multi-stakeholder initiatives such as these:
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Multi-Fiber Arrangement (MFA) Forum, which includes representatives of brands/retailers, trade unions, NGOs and international institutions committed to working collaboratively to address worker rights and apparel industry competitiveness. We participate in the MFA Forum’s in-country projects in Bangladesh, Lesotho and the Americas (Dominican Republic, Mexico and Nicaragua). Better Factories Cambodia, an International Labour Organization (ILO) program that addresses capacity building, monitoring and remediation, and worker rights education in Cambodian apparel factories. Better Work, a partnership between the ILO and International Finance Corporation (IFC) that works to improve labour standards and competitiveness in the apparel industries in countries such as Haiti, Indonesia, Lesotho and Vietnam. United Nations Global Compact, an initiative that organizes global, multi-stakeholder dialogues on corporate citizenship issues.
Levi’s in India Levi’s entered the Indian market in 1994-95, with the opening of their first store in Bangalore. Over the last 15 years, Levi’s has become the largest and most iconic jeans wear brand in the country. Closely associated with the evolution of jeans wear in India, Levi’s has been responsible for some of the most cutting-edge, definitive, jeans wear communication India has seen. With a product range that spans everyday-wear to extremely evolved, fashion-forward products, Levi’s has been one of the primary catalysts in accelerating the coming of age of Indian fashion scene. Levi Strauss & Co. markets the Levi’s, Dockers and Signature brands in India. The core values on which Levi Strauss & Co. is anchored are empathy, courage, integrity and originality. These values reflect its legacy of corporate citizenship and these values continue to guide its commitment to philanthropy and community involvement. In India also, Levi Strauss & Co.
has actively been involved in supporting programmes that help in the economic empowerment of the youth and women, educations programs that promote the awareness and understanding of the fight against HIV/AIDS.
SWOT Analysis Strengths 1. Levi’s enjoys high brand equity. People all around the world recognize the brand name. 2. Have environmentally friendly jeans, Levi’s Eco. 3. Levi’s products are unique and innovative in the style. 4. Patented copper riveting makes jeans stronger.
Weaknesses 1. Levi’s is late in joining trend of switching to premium jeans. 2. Net revenue has decreased during the past few years. 3. High costs of brand protection.
Opportunities 1. Companies are using new media to reach consumers. 2. Jeans industry expected to grow. 3. Relies heavily on few customers. Net sales to its ten largest customers totalled about 43 % of total sales.
Threats 1. Popular mass merchandiser private labels are taking more shelf space. 2. New companies filled the void created because Levi’s and others lacked innovation. 3. The decline of global cotton production. Cotton prices have increased since global cotton production decreased in 2009.
Competitor Analysis There are a several large firms competing against Levi Strauss Co. in the apparel industry. The closest competitor to Levi Strauss is the Pepe, Lee, Spykar, Diesel and Wrangler.
Data Collection
For this mini project, primary data as well as secondary data was collected. Primary data has been collected through personal contact. For this purpose questionnaire were distributed to the consumers as well as others. Secondary data has been collected from books, magazines and websites. The objective of collecting data was to know about the usage of Levi’s jeans. This was done by distributing a questionnaire to 50 people. Their opinions were collected and the survey was tabulated and analyzed.
DATA ANALYSIS
(a) Age Group
Age (in years) years)
1% 4% 17%
05 to 1 16 to 3 31 to 4 46 to 6
78%
Interpretation The people who use this are mostly in the age group of 16-30 years i.e. the dominating category is the students and the youth.
(b) Family Income level
Family Income Level (in RS)
15%
36%
< 100000 100000 - 2500 22%
250000 - 4000 > 400000
27%
Interpretation Most the people who use this lies in the income level above Rs 400000. The next dominating category of the family income level lies between Rs 250000 and Rs 400000.
(c) Brand preferred by the customers
Brand Brand Preferred Preferr ed
15%
20% 20%
Lee Levi'
17% 17%
Pep Dies 26%
Spy Spy
22% 22%
Interpretation From the above data it is clear that Levi’s dominates the market. 26% of the customers prefers Levi’s, followed closely by Pepe (22%), Lee (20%), Diesel (17%) and Spykar (15%).
(d) Factors Affecting Purchasing Decision
Factors Affecting Affecting Purchasing De cisio
16%
24%
Durabilit Style 22%
Size and Brand N Price
18%
20%
It can be analysed from the above data that, price is a major factor tat affects the purchasing decision. The style and the size and fit also affects the decisions to certain extend.
(e) Factors Influencing
Factors Influencing
17% 35% Family Friends 20%
Celebrities Advertiseme
28%
Advertisements influences the customers in a large extend. Celebrity endorsements also influence the customers in choosing Levi’s over other brands. This shows that the promotional activities done by an organisation plays a major part in attracting more customers.
(f) Performance Scale
Performance Scale
12%
2% 18%
Outstanding Satisfactory Somewha t Satisfac Satisfac Not Sure
68%
Interpretation Majority of the participants in the survey were satisfied with the performance of the product. 18% of the customers said that the performance was outstanding while 12% of customers said they were somewhat satisfied with the performance.
(g) Would you like to stick to this product in the future?
13% 8% Yes No Not S
79%
Majority of the customers were loyal to the brand. 13% of the consumers said they were not sure whether they will choose Levi’s in the future as there were many players in the market who pose stiff competition to Levi’s in terms of style, variety and price.
(h) Price of the product
Price - Is It Satisfactory
32%
Yes
No 68%
Interpretation 68% of the participants were of the opinion that the price of Levi’s jeans was not satisfactory. They generally shared a view that it was expensive. 32% of the participants were satisfied with the price.
(i)
Brand Loyalty
Brand Loyalt
24%
Very often
14%
Depends on price of othe brands To experiment with new b 28% 34%
I stay loyal to my brand
Interpretation Most of the participants were of the opinion that that they change the brand depending upon the price of other brands (28%) and to experiment with new brands (34%). 24% were loyal to the brand while 14% of the participants changed the brands very often.
(j) Are competitor’s product’s better in any aspect?
15%
Better value of money
44% 18%
Higher quality Better promotional techni No
23%
Interpretation Most of the participants in the survey believed that the competitor’s were not in any way better than Levi’s. 23% of the participants felt that the competitor’s used better promotional techniques. 18% of the people were of the opinion that competitor’s provided superior quality products compared to Levi’s jeans and 15% of the participants said the competitors provided better value of money.
Suggestions:
From the data collected from various people and sites, suggestions are made on the following areas: •
•
•
•
•
First of all the Levi’s products are considered as the most durable product. Therefore that area is secured. But the areas which Levi’s lacks are comfort ability and inexpensiveness. If Levi’s lower down its prices to some extent the sales volume could be increased to a very large extent. As we saw in the survey that people who are somewhat dissatisfied or who are completely dissatisfied gave the reason of high prices. The brand name of Levi’s is well recognized. We saw in the survey results that most people just to maintain their high status buy Levi’s products. Levi’s pays its maximum attention to the men’s wear. Although the women section and kid’s sections are present but they are not full filling the requirements much. The kid’s section, which is just in start, should be given attention to attract more customers.
Conclusion
Levi Strauss & Company had most of its early success because the firm was behaving monopolistically. The company patented the riveted jeans, increasing durability, and gaining popularity. Over the years, the company maintained profits by providing a wide range of products, capturing new markets, and increasing its market shares. The company created barriers to entry by patents and trademarks, and by differentiating its product from generic jeans. However as more firms entered the market, the company started losing customers and incurring losses. The upstart companies captured niche market shares from Levi Levi’s s immense market domination. Despite these reductions of sales, Levi Strauss & Co. maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long long-run profit opportunities.
Bibliography
1. Mr. Blue Jeans: A Story About Levi Strauss (Creative Minds) by Maryann N. Weidt 2. Life magazine (Nov 24, 1972) Articles – World is blue-jean country now and Where it began 122 years ago. 3. Popular Mechanics magazine (May 1999) Article – Levi’s jeans by Cliff Gromer 4. Inventors and Inventions by Doris Simonis 5. Business Week (December 1, 1997) Article - Levi's Is Hiking Up Its Pants by Linda Himelstein 6. Business Week magazine (22 July 2002) Article - Why Levi’s Still Looks Faded by - Louise Lee 7. The Ethical Revolution Sweeping Through the World World’s Sweatshops by Maxine Frith. 8. Brandweek (August 19, 1996) Article - Levi's New Dress Code by Elaine Underwood 9. Women’s Wear Daily (December 11, 1997) Article - Denim Dish: Dream Jeans for Teens by Becky Ebenkamp 10. Adweek (September 8, 1997) Article - Slates Speaks Directly to Men by Stan Gellers 11. Daily News Record (September 24, 1997) Article - Tailored Slacks Follow the Main floor Leader: Slates Boom Trickles-Up to Better Makers in Casual Fabrics and Golf wear 12. web.mit.edu/invent/iow/strauss.html web.mit.edu/invent/iow/strauss.html 13. www.levistrauss.com www.levistrauss.com
14. www.levi.co.in 15. www.dockers.com
Appendix - Questionnaire Name:
Sex:
1. Age Group: a) 05-15 b) 16-30 c) 31-45 d) 46-60 2. Family Income level: a) b) b) c) d)
< 100000 1000 10 0000 00-2 -250 5000 000 0 2500 25 0000 00-4 -400 0000 000 0 >40 4000 0000 00
3. Occupation: a) Student b) b) Empl Employ oyed ed c) Hou ouse se wif wife 4. How often do you wear jeans? a) 1-2 1-2 tim times es a wee week k b) b) 3-4 3-4 time timess a wee week k c) More More than than 5 times times a week week
5. How many pairs of jeans do you currently own? a) b) c) d)
1-3 4-6 7-9 10+
6. Which brands of jeans do you generally buy? a) Lee b) Levi’s
c) Pepe d) Diesel e) Spykar 7. What factors affects your purchasing decision? a) Dura Durabi bili lity ty b) Style c) Size and Fit d) Bran Brand d Name Name e) Price 8. Who/What influences you in buying Levi's jeans? a) b) b) c) d)
Family Frie riend ndss Cele Celebr brit itie iess Adve Advert rtis isem emen ents ts
9. How do you rate Levi’s jeans on the performance scale? a) b) b) c) d)
Outs Outsta tand ndin ing g Sati Satisf sfac acto tory ry Somewh Somewhat at satisf satisfact actory ory Not su sure
10. Would you like to stick to this product in the future? a) Yes b) No c) Not sure 11. Do you think the price of this product is satisfactory? a) Yes. I do b) No. I don’t think so
12. How often do you change your brand? a) Very ery oft often en b) Depends on price of other brands c) To experiment with new brands d) I stay stay loya loyall to my bran brand d 13. Do you feel the competitor’s products are better than this product in any ways? a) Better Better value value of Mon Money ey b) Higher Quality c) Better Better Promot Promotion ional al Techniq Techniques ues d) No
