Friday, January 12, 2007

Levis: On the Comeback Trail?

Hi all. I just read the following article in USA Today about how Levi's sales are gaining after a near-decade in decline. They attribute this turnaround to, among other things, Levi's "skinny jeans" for women. While that's all well and good, I visited the Levi's store on Lexington near Bloomingdale's a couple of months ago to check the skinnys out. I can't tell you if they were a good cut or fit or not because THEY COST $151 so I refused to even try them on. For me, Levi's skinny jean strategy is a good one for other retailers, such as Club Monaco that are charging a mere $98 for similar jeans. Prior, the thought of paying more than $50 for jeans had seemed outrageous to me, but now $98 seems like a steal!

And in similar skinny news (from a Reuters article): Gap's skinny black pants -- promoted as a new trend -- have ended up on the discount rack for $9.99, and some see mixed messages in marketing campaigns featuring rappers on one hand and deceased style icon Audrey Hepburn on the other.

The skinny conundrum continues...

Levi's fashions new outlook in ads, jeans
By Theresa Howard, USA TODAY
NEW YORK — Levi Strauss finally ironed out the wrinkles in 2005 after an eight-year slump.
After nearly a decade of sales declines, the company reported a 1% gain in fiscal 2005. Sales have chugged along since, and the company posted year-over-year profit gains of 14%, 50% and 29% in the first three quarters of fiscal 2006. "Things are finally turning the corner," says Amy Jasmer, director of publicity and promotion.
Among Levi's changes:
•New styles. Levi's was ready for the return to skinny and straight leg jeans last year. It promoted its 501 as the original straight leg for men. The new 504 is skinny and straight for women. "For years we took our eye off of innovation," Jasmer says. "We weren't putting out the most stylish jeans."
•New TV ads. Spots by longtime agency BBH, N.Y., gave some edge to Levi's image. One features a young man and woman walking a "straight line" through city streets, over obstacles, to meet. The music is a remake of Johnny Cash's I Walk the Line.
In a second ad, a man watching live TV news recognizes that a fleeing criminal is trying to steal his Levi's from the clothesline. He runs into his yard to catch him.
"The main objective of the advertising is to make sure we are consistently building the brand image," says Talbot Logan, group account director of BBH. "We've seen the brand gain strength in image, share and sales."
•More stores. Levi's is expanding its retailing unit to reach younger shoppers who favor specialty stores such as American Eagle. It has gone from seven stores in 2004 to 28 stores last year and plans to open more this year. A year ago, it returned to online sales; it sold online briefly several years ago.
•New CEO. John Anderson, a 27-year Levi Strauss veteran, took over as CEO in November after Phil Marineau, CEO since 1999, retired.
Though the Levi's brand has made great strides, the baby boom icon needs to make a stronger connection with younger consumers.
"We want to make sure we don't alienate older consumers who have been with us," Jasmer says. "But by virtue of denim we're trying to bring in new consumers."
That vital because the 18- to 24-year-olds buy more denim than any other age group, according to retail tracker NPD Group. That age group accounted for 33% of the $8.6 billion spent on denim in the year ended in October.
"There is still an opportunity for the brand to show this consumer that there is a range of styles and fits that look great on them," says BBH's Logan.
Results of Ad Track, USA TODAY's weekly consumer survey, indicate that the agency's latest ads haven't grabbed those younger consumers for Levi's just yet.
Overall, 17% of adults familiar with the ads like them "a lot" vs. the Ad Track average of 21%. But just 13% in the 18-to-24 age group gave them the top mark vs. 24% in the 40-to-49 group
Believing that the way it currently is spending its ad budget may not be in line with younger consumers, Levi's is rethinking how and where it puts marketing dollars.
In the fall the company opened four temporary stores on college campuses and sponsored a promotion that picked a handful of college students to be featured in a print ad campaign in the spring.
Also, this year Levi's will start to shift some ad dollars away from TV to new media that offer interactivity and that attract its sought-after young adults.
"We're looking at a small change and trying to be a little more engaging," Jasmer says.

1 comment:

Anonymous said...

I predict that the skinny jean will be all but dead come September - talk around a fashion trend that's completely unfriendly to most women! You're already seeing lots of wide-legged pants in the magazines. Even Kate Moss has been wearing wide-legged pants recently.