Levi Strauss & Co.
|This article needs additional citations for verification. (January 2011)|
|Industry||Clothing & Shoes|
|Headquarters||San Francisco, California, U.S.|
|Number of locations||1,000+|
|Key people||Chip Bergh (CEO); Harmit Singh (CFO)|
|Brands||Levi's, Dockers, Denizen, Signature by Levi Strauss & Co.|
|Operating income||$ 484 million|
|Total assets||$3.17 billion|
|Owners||Relatives of Levi Strauss|
Levi Strauss & Co. / / is a privately held American clothing company known worldwide for its Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Bavaria, to San Francisco, California to open a west coast branch of his brothers' New York dry goods business. The company's corporate headquarters is located at Levi's Plaza in San Francisco.
Levi Strauss & Co. is a worldwide 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.
Levi Strauss started the business at the 90 Sacramento Street address in San Francisco with entrepreneur William Price. He next moved the location to 62 Sacramento Street then 63 & 65 Sacramento Street. Jacob Davis, a Latvian Jewish immigrant, was a Reno, Nevada  tailor who frequently purchased bolts of cloth made from denim 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. The company created their first pair of Levis 501 Jeans in the 1890s, a style that went on to become the world's best selling item of clothing.
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.
Between the 1950s and 1980s, Levi's jeans became popular among a wide range of youth subcultures, including greasers, mods, rockers, and hippies. 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 crotch rivet and waist cinch were removed during World War II to conform to War Production Board requirements to conserve metal, and was not replaced after the war. Additionally, the back pocket rivets, which had been covered in denim since 1937, were removed completely in the 1950s due to complaints they scratched furniture. 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.
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From the early 1960s through the mid-1970s, Levi Strauss experienced significant 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 Walter Haas, Peter Haas Sr., Paul Glasco and George P. Simpkins Sr., expanded the firm's clothing line by adding new fashions and models, including stoned washed jeans through the acquisition of Great Western Garment Co.,(GWG), a Canadian clothing manufacturer, acquired by Levi's. The acquisition lead to the introduction of the modern "stone washing" technique, still in use by Levi Strauss. Simpkins is credited with the company's record paced expansion of its manufacturing capacity from 16 plants to more than 63 plants in the United States from 1964 to 1974 and 23 overseas. Levi's' expansion under Simpkins was accomplished without a single unionized employee as a result of Levi's' and the Haas family's' strong stance on human rights and Simpkins' use of "pay for performance" manufacturing from 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.
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 1996. Levi Strauss attempted to sell the Dockers division in 2004 to relieve part of the company's $2.6 billion outstanding debt.
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 pants made in the Northern Mariana Islands, 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 "slavelike" conditions. Today, most Levi's jeans are made outside the US, though a few of the higher end, more expensive styles are still made in the U.S.
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 collateral 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 Walmart, 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, Australia, New Zealand, India, Pakistan 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 successfully sued Guess?, Polo Ralph Lauren, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies.
In 2002, the company closed its Valencia Street plant in San Francisco, which had opened the same year of the city's April 1906 earthquake. by the end of 2003, the closure of Levi's last U.S. factory in San Antonio ended 150 years of its jeans being made in the USA.
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. In 2010, the company partnered with Filson, an outdoor goods manufacturer in Seattle, to produce a high-end line of jackets and workwear.
On May 8, 2013, the NFL's San Francisco 49ers announced that Levi Strauss & Co. had purchased the naming rights to their new stadium in Santa Clara, California. The naming rights deal calls for Levi's to pay $220.3 million to the city of Santa Clara and the 49ers over twenty years, with an option to extend the deal for another five years for around $75 million.
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Levi's marketing 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" and "The City Sleeps" 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 1986 adverts featuring "Wonderful World" and "Mad about the Boy" and the puppet, Flat Eric, in the ads featuring music by Mr. Oizo.
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- Fuerza Unida[dead link]
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- James Sterngold (June 13, 1996). "Levi Strauss Offers To Pay A Dividend To Workers". The New York Times.
- Girard, Kim (July 15, 2003). "Supply Chain Partnerships: How Levi's Got Its Jeans into Wal-Mart". CIO.com. CXO Media, Inc. Retrieved 2010-03-16. "David Bergen, Levi’s senior vice president and CIO, says his company is caught in the "jaws of death." "We’re getting squeezed," he says in his office in Levi’s Plaza, which has a startling view of San Francisco Bay and is about a 30-minute walk away from the Post Street store. But Levi’s thinks it may have found a way to cheat a retail demise. Wal-Mart. Wal-Mart, the world’s largest retailer, is where moms go to stock up on Max and Maddy’s school supplies, their juice boxes and, of course, their jeans. So if you want the kids, and the rest of their families, you need to sell at Wal-Mart. And you need a new product for this new customer. This month, Levi’s is introducing its new, less expensive Signature jeans line. (The jeans, for men, women and children, sell for around $23. They have fewer detail finishes than Levi’s other lines. They don’t have the company’s trademark red tab or stitching on the pocket.) Of course, there’s something in it for Wal-Mart. The company, already the largest clothing retailer in the world, wants more affluent customers. To lure them in, it needs big brands. Acknowledging that the company’s customers come from a "cross-section of income levels and lifestyles," Wal-Mart Senior Vice President Lois Mikita says the company "continues to tailor its selection to meet the needs of those customers.""
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- Strasburg, Jenny (April 9, 2002). "Levi Strauss buttoning up its S.F. operations / Valencia Street factory to close by summer". San Francisco Chronicle. Retrieved 2014-05-22. "As part of Levi's continuing move to cut costs by unloading what little in- house manufacturing it still does, the company said yesterday that it will close six U.S. plants by October. That will leave just two Levi plants operating on U.S. soil, both located in San Antonio. Levi Strauss & Co.'s 96-year-old Valencia Street plant will close by summer, perhaps becoming a museum but definitely staying in company hands even after its production lights go out, its stewards said.... Teddy Roosevelt was president when the plant opened to applause in a city badly shaken and burnt from the 1906 earthquake."
- "Levi's set to close last U.S. factory". The Baltimore Sun. New York Times News Service. October 19, 2003. Retrieved 2014-05-22. "The $4.2 billion company...has turned out more than 3.5 billion pairs of the sturdy denim jeans ... But by the end of the year, the last pair of Levi's made in America will roll off the sewing and finishing lines at the factory here ... The step follows the closing of its original plant in Valencia, Calif., last year, and of many other plants in the 1990s, when company revenues started dropping from a peak of $7 billion."
- "Levi Strauss profit up; Home Depot lowers outlook". San Jose Mercury News. Associated Press. July 11, 2007. Retrieved 2010-03-16.
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- "Marketplace: Levi's may be dressed up to go public". Marketplace.publicradio.org. July 11, 2007. Retrieved 2010-03-16.[dead link]
- Levi’s jeans lures Indians shoppers with credit plan
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- "Filson signs clothing deal with Levi’s". Puget Sound Business Journal. August 3, 2010. Retrieved 21 April 2012.
- Rosenberg, Mike (8 May 2013). "Levi's Stadium: 49ers' new Santa Clara home gets a name in $220 million deal". San Jose Mercury News. Retrieved 2013-05-08.
- Ford, Carin T. (April 2004). Levi Strauss: The Man Behind Blue Jeans (Famous Inventors). Enslow Publishers. ISBN 0-7660-2249-8.
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- Van Steenwyk (June 1988). Levi Strauss: The Blue Jeans Man. Walker & Company. ISBN 0-8027-6795-8.
- Ed Cray (1978). Levi's: The Shrink to Fit business that stretched to cover the world. Boston: Houghton Mifflin Company. ISBN 0-395-26477-4.
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