How Levi’s Is Preparing for Another Season of Record-Breaking Heat

Levi Strauss & Co.’s efforts to elevate the Levi’s brand and widen its reach are taking shape.

Sales for the fourth quarter ended Nov. 26 rose 3 percent to $1.6 billion. In the company’s earnings call, Michelle Gass, who officially took the helm from outgoing CEO Chip Bergh last week, said the brand has increased the number of 18- to 30-year-old buyers globally and is attracting higher income consumers.

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Recent collaborations with brands that have loyal fanbases like Stussy and Crocs sparked attention, and a collaboration with Kenzo placed Levi’s into the luxury space. Meanwhile, Levi’s is downsizing its family of value brands, Denizen and Signature, to just one.

“Based on the work we’ve done, we have made the strategic decision in collaboration with our customers to discontinue the Denizen brand. Given the successful roll out of Red Tab in Target, our focus there will be on growing the higher gross margin Red Tab business, where we are seeing strong performance in comp doors,” Gass said.

She added that the company remains committed to the value segment and growing Signature.

The denim giant is also finding its groove in non-denim bottoms. Driven by the XX Chino, the category increased nearly 40 percent in Q4.

Levi’s is leaning into the expertise of its sister brand Dockers to fuel its non-denim bottoms business. Gass said Levi’s developed an innovative non-denim pant for men with technical properties, including moisture control and 360-degree mobility to address this incremental opportunity.

“This pant is versatile and appropriate for multiple wear occasions from working at the office to going on a hike and provides us with the opportunity to capture more share of his closet,” she said. “One of our largest U.S. men’s product launches to date, the Tech Pant, will be available early this year on our direct-to-consumer channels and through key wholesale partners.”

As gorpcore trends gain momentum, Levi’s is looking for ways to enhance the functionality of denim as well. The brand is preparing for another hot summer with two new denim product launches. “As temperatures get warm, we want people to be in Levi’s year-round. That impacted us this past year,” she said.

Levi’s plans to globally scale its Performance Cool line, which Gass said has been a “big success” in Asia, providing consumers with options that allow them to wear denim all year. The brand will also bow an assortment of its most popular fits with its lightest weight denim yet.

The Loose Fit, which represents half of the brand’s women’s business, is creating opportunities for more fashion fits. Gass mentioned Levi’s latest style to watch is the XL, which can be worn either as a high or low rise.

Beyond bottoms, Gass said Levi’s is evolving its position from being a denim bottoms brand into a true lifestyle brand for “all things denim.”

“This denim dressing goes across many untapped segments for us, such as skirts, dresses, tops, outerwear and accessories,” she said. “While we’ve made progress this last year with denim skirts and dresses helping drive these categories up nearly 50 percent, we are in the very early stages of this exciting opportunity and have lots of newness in the pipeline coming in 2024 and beyond.”