5 Reasons Why Levi Strauss Just Increased Profits by 264%

Posted by Ryan Robinson on Jul 16, 2013


Long regarded as the iconic American denim company, Levi Strauss is excelling in the apparel industry because of these 5 crucial reasons.

It's no easy feat to drive both revenue and profit margins, especially a 264% boost in profit in just one year. 

With global revenues of over $4.7 billion in 2012, it's safe to say Levi Strauss is back to doing things well. The company has been the staple of American denim both in the US and around the world since it's founding in 1873. Profits are now up over 264% for quarter two of 2013 to $48.2 million.

Levi Strauss has managed to do much more than just stay relevant within the apparel industry since the inception of denim jeans. The company is focusing on the development and innovation within it's core brands of Levi's and Dockers. Despite fierce competition within the denim market and heavy debt loads to support both family leveraged buyouts and the company's strategic objectives, Levi's is once again heading down the path to success.  

There are several reasons why Levi's was able to achieve such impressive results, which include both internal and external factors. Here's 5 lessons you can learn from Levi Strauss & their CEO, Chip Bergh to help differentiate your brand.

1. Forward-thinking Strategy

Levi Strauss has dedicated themselves to focusing on driving product innovation for the Levi's and Dockers brands. It's important to have a very fine-tuned, focused strategy with measurable goals. These plans include continuing to invest heavily in building the company's brand names, improving the customer-experience in retail locations, and building out more direct-to-consumer sales channels. This strategy is responsible for the company's increased sales in company-owned stores and phase-out of the Denizen brand in Asia.

2. Declining Cotton Prices

Over the past year, cotton prices have been at an elevated level which has been tightening margins for apparel brands accross the board. Prices for the raw material are going down once again amid expectations of higher suppply, and the company's boost in profit margins is certainly aided by this. 

3. Innovative Marketing

Levi's is doing an incredible job of employing unique marketing campaigns and staying very edgy through use of beautiful images, taglines that invoke a sense of adventure, clever video engagement, and more. Most notably, the company has employed a highly visual marketing campaign across all digital media outlets including websites, social media platforms, online advertisements, and television ads. The Levi's "Go Forth" campaign features stunning photos of individuals embarking on adventures with taglines the likes of "Let the average man be devine," and "Strike out for the new world."    

4. Elevated Social Media Engagement

With a strong Facebook, Instagram, and Twitter following, Levi's is leveraging the power of social media to turn fans into customers and bring them into their sphere of influence. The company frequently advertises online deals & specials that are unique to their social following which allows them to efficiently track their ROI on social media. By engaging their customers and creating unique benefits that incentivize them to follow on social media platforms, they are building a powerful brand that will appreciate in value over time.

5. Renewed Dedication to Innovation

Levi's began implementing many key innovative changes to their business model such as the focus on the profitable core business, expanding much more selectively beyond the core moving forward, and setting sights on becoming a world class retailer. These significant changes reflect the company's renewed spirit of ingenuity and are now beginning to show positive results for the brand. 

Levi's will remain a contendor in the apparel industry for years to come, but only time will tell how their innovation initiatives will play into the company's future.

Where do you think Levi's is heading?


Source: (Levi Strauss)

Topics: apparel industry, Design, Pricing, Development, Branding