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Levi Strauss & Co.

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Levi Strauss & Co
Company typePrivate
ISINUS52736R1023 Edit this on Wikidata
IndustryClothing
Founded1853 (1853)
FounderLevi Strauss
HeadquartersSan Francisco, California, U.S.
Area served
Worldwide
Key people
Robert A. "Bob" Eckert Chairman of the Board
John R. Anderson President and CEO
ProductsJeans
RevenueUS$ 4.303 billion (2008)[1]
OwnerDescendants of Levi Strauss
Number of employees
11,400 (2008)[1]
DivisionsLevi's, Dockers, Signature by Levi Strauss & Co.
WebsiteLevi Strauss Homepage

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. 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 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.[2]

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.[3] The Dockers brand, launched in 1986[4] 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.[5]

Launched in 2003, Levi Strauss Signature features jeanswear and casualwear.[6] 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.[7]

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.[8]

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 US 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 "slavelike" conditions. Today, Levis 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 US labor history, distributing more than $9 million in restitution to some 1,200 employees.[9][10][11] 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 (primarily Hispanic women[citation needed]), some of whom had worked for Levi Strauss for decades, saw their jobs exported to Costa Rica.[12] 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.[13][14][15]

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.[16] 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.[17] 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 Wal-Mart stores until 2006.[18] 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).[19] Levi's has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies.[20]

By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years.[21] Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s.[22] After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007.[23]

In 2009, it was noted in the media for selling Jeans on interest-free credit, due to the Global Recession.[24][25]

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" and "Mad about the Boy" and the puppet, Flat Eric, in the ads featuring music by Mr. Oizo.

Songs re-popularized by Levi's commercials
Song title Artist Original recording Year of Levi's advert UK chart US chart
"When a Man Loves a Woman" Percy Sledge 1966 1987 2
"Wonderful World" Sam Cooke 1960 1986 2
"C'mon Everybody" Eddie Cochran 1958 1988 14
"The Joker" Steve Miller Band 1973 1990 1
"Mad about the Boy" Dinah Washington 1952 1992
"Inside" Stiltskin 1995 1
"Boombastic" Shaggy 1995 1
"Spaceman" Babylon Zoo 1996 1
"Flat Beat" Mr. Oizo 1999 1

Notes

  1. ^ a b "Levi Strauss & Co. | Company profile from Hoover's". Hoovers.com. Retrieved 2010-03-16.
  2. ^ "Levi's (Europe)". Levi.com. Retrieved 2010-03-16.
  3. ^ http://www.conestogac.on.ca/~sfinlay/IMC/cases/LevisGWG.htm
  4. ^ "Dockers.com". Dockers.com. Retrieved 2010-03-16.
  5. ^ Sarkar, Pia (2005-09-11). "Levi's tries to polish Dockers image / New ad campaign aimed at attracting women customers". Sfgate.com. Retrieved 2010-03-16.
  6. ^ "(R) - Stylish fits and finishes with a heritage of craftsmanship and quality". Levi Strauss Signature. Retrieved 2010-03-16.
  7. ^ Carin C. Quinn, "The Jeaning of America—and the World", American Heritage 29(3), April/May 1978.
  8. ^ Carin C. Quinn, "The Jeaning of America—and the World", American Heritage 29(3), April/May 1978 (this does not appear in the online edition)
  9. ^ May 1998, Case file Levi Strauss & Co[dead link]
  10. ^ "Weekend Standard - The island that lost its shirts". Thestandard.com.hk. Retrieved 2010-03-16.
  11. ^ "The New York Times; July 18, 1993: Made in the U.S.A.? Hard Labor on a Pacific Island/A special report.; Saipan Sweatshops Are No American Dream". House.gov. 1993-07-18. Retrieved 2010-03-16. [dead link]
  12. ^ Fuerza Unida
  13. ^ "Fuerza Unida". Inmotionmagazine.com. Retrieved 2010-03-16.
  14. ^ "Fuerza Unida, Mujer a Mujer: Firsthand Account of Levi's". Hartford-hwp.com. Retrieved 2010-03-16.
  15. ^ FUERZA UNIDA 710 New Laredo Hwy[dead link]
  16. ^ "Levi Strauss & Co. - Financials". Levistrauss.com. Retrieved 2010-03-16.
  17. ^ James Sterngold (June 13, 1996). "Levi Strauss Offers To Pay A Dividend To Workers". The New York Times.
  18. ^ Girard, Kim (2003-07-15). "Supply Chain Partnerships: How Levi's Got Its Jeans into Wal-Mart - CIO.com - Business Technology Leadership". CIO.com. Retrieved 2010-03-16.
  19. ^ "Latest Status Info". Tarr.uspto.gov. Retrieved 2010-03-16.
  20. ^ Levi’s Turns to Suing Its Rivals - New York Times<
  21. ^ "Wire Feed: Levi Strauss profit up; Home Depot lowers outlook - San Jose Mercury News". Mercurynews.com. Retrieved 2010-03-16.
  22. ^ "Levi Strauss earnings rise 61% in 1st quarter - Los Angeles Times". Latimes.com. 1985-08-26. Retrieved 2010-03-16. [dead link]
  23. ^ "Marketplace: Levi's may be dressed up to go public". Marketplace.publicradio.org. 2007-07-11. Retrieved 2010-03-16.
  24. ^ Levi’s jeans lures Indians shoppers with credit plan
  25. ^ Economist 2010 article on Innovation

References

  • Ford, Carin T. (2004). Levi Strauss: The Man Behind Blue Jeans (Famous Inventors). Enslow Publishers. ISBN 0-7660-2249-8. {{cite book}}: Unknown parameter |month= ignored (help)
  • Roth, Art. The Levi's story.
  • Van Steenwyk (1988). Levi Strauss: The Blue Jeans Man. Walker & Company. ISBN 0-8027-6795-8. {{cite book}}: Unknown parameter |month= ignored (help)
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