Levi Strauss & Co.

For more information on Levi Strauss & Co., visit Britannica.com.

Type: Private
On the web: http://www.levistrauss.com
Employees: 11,400
Employee growth: (1.3%)

Levi Strauss & Co. (LS&CO.) strives to provide the world's casual workday wardrobe, inside and out. LS&CO., a top manufacturer of brand-name clothing globally, sells jeans and sportswear under the Levi's, Dockers, and Levi Strauss Signature names in more than 110 countries. It also markets men's and women's underwear and loungewear. Levi's jeans -- department store staples -- were once the uniform of American youth, but LS&CO. has been working to reconnect with the niche and expand outside the US. It has transformed its products portfolio to include wrinkle-free and stain-resistant fabrics used in making some of its Levi's and Dockers slacks. The Haas family (relatives of founder Levi Strauss) owns LS&CO.

Key numbers for fiscal year ending November, 2008:
Sales: $4,303.1M
One year growth: 0.9%
Net income: $229.3M
Income growth: (50.2%)

Officers:
Chairman: T. Gary Rogers
President, CEO, and Director: R. John Anderson
EVP and CFO: Blake J. Jorgensen

Competitors:
The Gap
VF
Wal-Mart

Incorporated: 1890
SIC: 2325 Men's/Boys' Trousers & Slacks; 2321 Men's/Boys' Shirts; 2331 Women's/Misses' Blouses & Shirts; 2339 Women's/Misses' Outerwear Nec

Levi Strauss & Co., the world's largest brand-name apparel manufacturer, gave the world blue jeans and grew enormously rich on this piece of U.S. culture. Indeed, around the world the name of the company's founder has grown to be synonymous with the pants he invented: Levi's. Levi Strauss markets apparel in more than 60 countries, and it has 53 production facilities and 32 customer service centers in 49 countries. The company operates wholly owned businesses in most European countries, in South Africa, Australia, Japan, Hong Kong, India, The Philippines, Malaysia, New Zealand, South Korea, Taiwan, Brazil and Argentina, and operates through joint ventures and licensing agreements in a host of other countries. Besides its well-known Levi's brand products, the company markets clothing and accessories under the brand names Dockers, Britannia, and Slates.

Levi Strauss, born in Bavaria in 1829, emigrated to the United States with his family in 1847, at the age of 18. In New York, he was met by his two half-brothers, who had already established a dry-goods business. A year later, he was dispatched to Kentucky to live with relatives and walk the countryside peddling his brothers' goods.

While Levi Strauss was still traveling about the hills of the South, his older sister's husband, David Stern, established a dry-goods store in San Francisco, California, in the wake of the 1849 California gold rush, and the company that would come to bear Levi Strauss's name dates its beginning to this 1850 founding. Three years later, Strauss made the arduous sea journey around Cape Horn to join his brother-in-law. San Francisco at the time was a booming frontier town, and the opportunity was ripe for a well-run business to flourish. Strauss and Stern set up their small store near the waterfront, where they could easily receive shipments of goods from the Strauss brothers back east.

Jeans, which would become the staple of the family business, were invented when Levi Strauss, noting the need for rugged pants for miners, had a tailor sew pants from some sturdy brown canvas he had brought with him on his journey. Once the supply of canvas was exhausted, Strauss turned to a thick fabric made in the French town of Nimes, known as serge de Nimes, which would be shortened to denim. The denim pants, dyed with indigo to make them blue, sold quickly, and the business of Levi Strauss & Co. expanded rapidly, moving three times to new and expanded quarters in the next 13 years. In 1866 the company moved to a luxurious new location on Battery Street, only to have the building cracked from roof to foundation in an earthquake two years later.

In 1872 the proprietors of Levi Strauss & Co. received a letter from Jacob Davis, a tailor in Nevada, offering them a half interest in the patent on a technique he had invented for strengthening the seams of pants by fastening them with rivets. In return, they would pay the cost of obtaining the patent. The cost was negligible, and Strauss and his brother-in-law quickly took the tailor up on his offer. The following year, the company was granted a patent on the use of rivets to secure pocket seams, and also on the double-arc stitching found on the back pockets of its pants.

At first, the company had the pants sewn by tailors working individually at home, in the same way that the Strauss brothers in New York manufactured goods. Soon, however, the demand for the new pants became too great, despite the economic depression that had struck California in 1873, and the company collected its stitchers under one roof, in a small factory on Fremont Street, which was managed by Davis, the tailor from Nevada. Such remarkable success brought envious competitors, and Levi Strauss & Co. filed its first lawsuit for patent infringement against two other makers of riveted clothing in January 1874. On the second day of that month, the founder of the San Francisco concern, David Stern, died. About two years later, Strauss's two oldest nephews, Jacob and Louis Stern, entered the firm with their uncle.

In 1877, in a climate of dire economic conditions, mobs attacked San Francisco's Chinatown, sacking and burning shops and homes in a three-day riot. White men, unable to find work, took out their frustrations on the Chinese, who had been willing to work for lower wages. In the wake of this event, Levi Strauss & Co. solidified its policy of courting its customers' goodwill by relying exclusively on white women as seamstresses. Because this entailed paying higher wages, the company had to charge higher prices for its products, and thus find ways to deliver higher-quality goods.

In 1877 the Levi Strauss & Co. factory expanded, and the notable features of Levi's pants--the dark blue denim, the rivets, the stitching, the guarantee of quality--became further standardized. By 1879 the pants were selling for $1.46, and they had become widely worn in the rough-and-tumble mines and ranches of the West. The firm also continued to sell other dry goods, chalking up sales of $2.4 million in 1880, and it prospered throughout the 1880s.

In 1886 the "Two Horse Brand" leather tag, showing a team of horses trying to pull apart a pair of pants, began to be sewn into the back of the company's "waist-high overalls," the term Levi Strauss preferred to "jeans." In 1890 the firm assigned its first lot numbers to its products, and the famous number "501" was assigned to the riveted pants. In that year as well, Levi Strauss & Co. was formally incorporated and issued 18,000 shares of stock in the company to family members and employees.

In September 1902, the patriarch of the company died. In his later years, Levi Strauss had entrusted the business more to his four Stern nephews, who inherited the firm, in order to devote his energy to charitable and civic causes. Four years after Strauss's death the company endured another shock, when the Great San Francisco Earthquake and Fire of 1906 struck. Both the company's headquarters building on Battery Street and the factory on Fremont Street were destroyed. Along with the rest of the city, Levi Strauss & Co. rebuilt, but the ensuing years were difficult. In 1907 a financial panic, which started in New York and crept westward, caused a slowdown in business, and the company began to streamline the merchandise it sold, relying more and more on its own products. Overall, however, sales were flat, and the four Stern brothers had drifted into a pattern of hands-off management.

In 1912 the company introduced its first innovative product in decades, Koveralls, playsuits for children designed by Simon Davis, the son of tailor Jacob Davis, who had followed his father into the business. Advertised widely, Koveralls became the first Levi Strauss & Co. product to be sold nationwide, helping the company to eventually break out of its regional market. The coming of World War I, and the boom in production for the war, had little or no impact on Levi Strauss & Co., since the company held no government contracts. Its riveted denim goods were sold only to the western laborers for whom they had originally been manufactured, and resale of eastern goods accounted for twice the sales of goods made at the San Francisco factory. Slowly, under the hands of the aging Stern brothers, who were resistant to change, Levi Strauss & Co.'s enterprise was losing ground.

In 1919 Sigmund Stern, who would take over the presidency of the company from his brother, Jacob, in 1921, brought aboard his son-in-law, Walter Haas, to give new blood to the leadership of Levi Strauss & Co. The Haas family, part of the Stern and Strauss clans by marriage, would continue to lead the company into the early 1990s. Walter Haas had little background in the family business, but one of the first changes he made was to update the company's inefficient system of keeping financial records. Despite Haas's attempts at efficiency, the company was battered in the early 1920s by a steep drop in the cost of cotton, the primary raw material for its products, that allowed competitors from other parts of the nation to undercut its prices. Company profits fell by one-third in 1920. In addition, Haas discovered that Levi Strauss & Co. was losing $1 on every dozen Koveralls sold. After a brief internal struggle, the price of Koveralls was adjusted, and steps to increase overall productivity, including the implementation, at this late date, of the assembly-line system, were taken.

The company began attaching belt loops to its basic denim pants in 1922, in addition to the traditional suspender buttons. Throughout the 1920s, Levi Strauss & Co. did business at a profit under the direction of Haas and his brother-in-law Daniel Koshland, a banker, whom he had brought into the firm to assist him. The firm found itself relying increasingly on the pants it manufactured, rather than the other dry goods it wholesaled, for the bulk of its profits. By 1929, 70 percent of the firm's profit derived from its sale of jeans.

With the stock market crash in 1929, and the subsequent Great Depression, Levi Strauss & Co. fell on hard times. The widespread unemployment that swept the country throughout the 1930s hit the manual laborers who bought the company's pants particularly hard. By 1930 the company's profits had vanished, and it posted a loss on sales that had fallen one-sixth. Unwilling to cut back production by firing workers, the company amassed a large backlog of unsold products, and then put its employees on a three-day work week. By 1932 company sales had dropped to half their 1929 level. With the coming of the next year, however, the Depression had started to lessen, and sales of Levi's pants slowly began to pick up.

In the economic turmoil of the 1930s, the growing U.S. union movement gained a new stronghold in San Francisco. Although workers in the Levi Strauss & Co. factory had not joined a union, organized labor's insistence that union workers wear union-made clothes sharply limited the company's sales in the heavily unionized San Francisco area. In 1935 Levi Strauss & Co. employees joined the United Garment Workers with management's acquiescence, thereby averting a strike and ending the virtual union boycott of Levi Strauss & Co.'s products.

The Depression and subsequent farm failures of the 1930s eventually worked in the company's favor, enabling it to break out of the relatively small market it had served since its inception. Western ranchers, unable to support themselves through agriculture, turned in the mid-1930s to tourism, inviting easterners to visit "dude ranches," where they were introduced to the cowboy's habitual garb, Levi's jeans. In addition, the advent and growth in popularity of Hollywood western movies further spread the word about Levi's jeans. In its advertising the company had always emphasized durability, but now it also stressed a certain western mystique. To capitalize on its growing brand identification, the company added the trademarked red "Levi's" tab to the back pocket of its pants in 1936, the first label to be placed on the outside of a piece of clothing. As demand increased, the vast stockpile of denim pants accumulated during the early years of the 1930s became depleted, and the factory returned to normal operation.

By 1939 the Levi Strauss & Co. blue denim "waist overall" had just begun to be popular outside the world of blue-collar workers. College students in California and Oregon adopted them as a fad, and slowly this humble item of clothing began to take on a status all its own. After the United States entered World War II, the government declared the jeans an essential commodity for the war effort, available only to defense workers. This restricted distribution made them an even more coveted item, and contributed, in the long run, to the brand's success. In the short run, however, wartime price restrictions cut into the company's profits.

With the war's end, the company was well-situated to prosper. Demographic shifts had brought a large number of potential new customers to the West Coast, and Levi Strauss & Co. now operated five jeans factories, in a futile effort to keep up with demand. The immediate postwar years brought a significant production shortage, and the company instituted a strict program of allocation, favoring retailers that were long-time customers. By 1948 company profits for the first time topped $1 million on sales of four million pairs of pants.

In the booming postwar economy of the 1950s, Levi Strauss & Co. underwent the most significant transition in the company's history. Taking advantage of demographic trends, the company began to focus its marketing efforts on young people, members of the "baby boom," who would wear its pants, now known colloquially as "Levi's," for play, not work. Targeting this new market involved widening the company's sales force to a truly nationwide scope, and shifting its emphasis from rural to more urban areas. As a sign of the company's future, Levi Strauss & Co. closed down its business wholesaling others' merchandise in the early 1950s.

Once again, in the 1950s Hollywood gave the company a large boost in its efforts to sell jeans to young people, when actors such as Marlon Brando and James Dean appeared in The Wild Ones and Rebel without a Cause, personifying youthful rebellion, and wearing jeans. The pants were losing their status as a symbol of the rugged frontier, and becoming instead a symbol of defiance toward the adult world. Levi's were on their way to becoming the uniform of an entire generation.

In 1954 the company branched out from denim to the sportswear business, launching Lighter Blues, a line of casual slacks for men. The following year the company added jeans with zipper flies, as opposed to the traditional five-button fly, in an attempt to woo customers in the East, where the pants, relegated to department store bargain basements, lagged in popularity. By the end of the decade, Levi Strauss & Co. was selling 20 million pieces of clothing a year, half of them jeans. The company was growing fast, and profits were robust.

In the late 1950s and early 1960s, Levi Strauss & Co. experimented with different products and lines of clothing in an effort to build on its reputation and diversify its offerings. In 1959 the company introduced "Orange, Lemon and Lime," pants in six bold colors, which were a short-lived hit. The following year, white Levi's were introduced, a duplicate of traditional jeans, but made in beige twill. Also in 1960, the company introduced pre-shrunk denim jeans, in an effort to overcome the objections of eastern customers, who were uncomfortable with shrinking pants. In 1963 stretch denim and corduroy Levi's joined the fold.

In 1964, after an arduous and expensive process of development, Levi Strauss & Co. introduced Sta-Prest permanent-press pants. Although the product was an initial sales success, problems with the chemical process that created a crease resulted in a large number of defective pants, and it was only later that the pants were perfected. The following year, the company expanded its international division to cover Europe, relying on Europeans to manage company operations in their home countries.

Throughout the 1960s, the company profited from movements in U.S. society, such as campus rebellions and the counter-culture, in which jeans became a uniform. The company's growth was mind-boggling. New manufacturing facilities were added steadily, but demand for jeans still outstripped supply. In the mid-1960s, sales doubled in just three years to $152 million in 1966. That year, the company negotiated a $20 million loan to finance further expansion. Two years later, the company reorganized, establishing a division to produce and market women's clothing. By 1968 the company had grown to become one of the six largest clothing manufacturers in the United States, with sales nearing $200 million.

In 1971 Levi Strauss & Co.'s long-standing status as a wholly family- and employee-owned enterprise came to an end, when the company sold stock to the public for the first time. Denim jeans, Levi's in particular, had transcended the status of a mere product to become a worldwide social and cultural phenomenon, and the company could no longer raise enough capital privately to pay for needed expansion. The craze for jeans continued to grow, with seemingly no end in sight. The company coped with a constant shortage of denim. Levi Strauss & Co.'s existing, heavily centralized structure became inadequate, and operations were broken into four divisions: jeans, Levi's for women, boys' wear, and men's sportswear.

The company's phenomenal growth caught up with it in 1973, when its European division found itself with huge supplies of jeans in an outmoded style--straight-legged, as opposed to flared, or bell-bottomed--with more of the same on order. The problem was the culmination of years of under-management, and cost the company $12 million as it tried to unload the overstock. For the first time since the Depression, Levi Strauss & Co. announced a losing quarter, and the company's stock price fell dramatically. The following year, European operations were reorganized, and the company moved its headquarters from the site it had occupied on Battery Street for 108 years to new quarters. Seven years later, the company would move again to Levi's Plaza, a newly built complex.

Despite the sobering demonstration in Europe of the company's fallibility, by 1974 sales of Levi Strauss & Co. products had reached $1 billion. The following year the company was once again reminded of the hazards of operating in the murky waters of international business when it was revealed that Levi Strauss & Co. employees in international locations had bribed foreign officials on four separate occasions. When the incidents were discovered by the home office in San Francisco, the practice was immediately terminated. In addition, the company ran into trouble domestically in 1976 when the Federal Trade Commission accused it of price-fixing and restraint of trade because it prohibited retailers from discounting its products. The company reached an agreement with the government in 1977 in which it did not admit wrongdoing, but gave up suggested pricing, retaining the freedom not to sell to certain retailers. In the next several years, the company settled several suits, brought in nine states that charged illegal price-setting practices. The 1970s also saw the formation of the company's community-affairs department, which is Levi Strauss & Co.'s philanthropic arm, and of community-involvement teams, which are company-funded employee groups that participate in projects in communities in which Levi Strauss & Co. does business.

By 1977 Levi Strauss & Co. had become the largest clothing maker in the world. In addition to its original products, the company had grown through acquisitions, and also licensed its name to be used on other products, such as shoes and socks. Sales doubled in just four years, to hit $2 billion in 1979. Purchases such as Koracorp Industries Inc., a large maker of men's and women's sportswear, in 1979, and Santone Industries Inc., a menswear manufacturer, in 1981, prepared the ground for further growth.

The company, now an industry behemoth, ran into difficulties in the early 1980s, however, as the demand for denim stabilized, and its profits flattened. Attempting to increase its distribution, the company reached agreements with several mass merchandisers, including J.C. Penney and Sears, to market its products. Nonetheless, earnings dropped by nearly 25 percent in 1981, and the company undertook another reorganization, which included the elimination of one level of corporate management. Profits continued to plummet in 1982, and the company shut down nine plants, eliminating 2,000 jobs.

Levi Strauss & Co.'s fortunes made a short recovery in 1983, and the company planned a $40 million promotional tie-in with the 1984 Olympics to promote its relatively new active-wear division. Nevertheless, during the year of the Olympics, in which the firm dressed more than 60,000 participants in the games, profits were down again, and the company undertook a major retrenching, closing many factories and eliminating thousands of jobs. Faced with a demographic trend that showed the baby boomers outgrowing jeans, the company began heavy advertising campaigns, allied itself with designer Perry Ellis in an attempt to move into the high-fashion market, and continued its plans to retrench, as profits dropped by 50 percent.

In 1985, as Levi Strauss & Co. continued to restructure and cut back, the company was taken private in a leveraged buy out for $1.45 billion by the Haas family, descendants of its founders and long-time company leaders. Several other officers and directors also were members of the buy out group, Levi Strauss Associates Inc. The following year the company introduced a successful upscale men's pants line, Dockers, and, with increasing demand around the world for U.S. jeans, and with the addition of innovative finishes, such as bleaching or stone-washing, 1990 sales reached $4 billion.

Dockers was one of the most successful brand launches in the history of the American apparel industry. The cotton pants appealed to older customers, whose expanding waistlines didn't fit into traditional jeans any more. Sales of Dockers alone came to $1 billion by 1994, and Dockers represented almost 30 percent of Levi's domestic sales. However, this was only one part of the success of the newly private company. CEO Haas, along with Thomas Tusher, head of Levi's foreign operations, transformed the company's overseas markets. In the 1980s, Levi's had diversified its product in Europe into dozens of unrelated lines. Foreign operations accounted for only 23 percent of sales in 1984. Tusher and Haas moved to concentrate foreign sales on the classic 501 jeans, and positioned the pants as a high-priced, prestige product. The company began selling its jeans at posh boutiques in Europe and Japan, at prices more than double the U.S. price. By 1992, foreign sales represented close to 40 percent of the company's revenues, and over 50 percent of profits.

Levi Strauss also tried to upgrade the image of its pants in the U.S., with great success. Levi Strauss spent $230 million on advertising in 1992, in a campaign to add glamour to its old stand-by. Levi's jeans, which were being sold at lower-end department stores like J.C. Penney and Sears, Roebuck began to appear in Macy's, with a considerably higher price tag. The company also began to open its own stand-alone jeans boutiques. The flagship store in Manhattan opened across the street from Bloomingdale's in 1993. Standard 501 jeans there cost $47. Macy's charged $42, and J.C. Penney $29.99. Of course in Europe, the price could be over $80. The same pair of pants retailed at these drastically different prices depending on where it was bought. Not surprisingly under these circumstances, the company's profits soared. Earnings were $155 million on the average in the 1980s. By 1990, earnings stood at $251, and the next year increased to $361. The next two years each added a hundred million also, until by 1995 the company earned over $700 million.

By 1996, Levi Strauss was virtually free of debt, and the company announced it would undertake a second leveraged buy out later in the year, to concentrate its stock in fewer hands. The company made plans to spend $90 million to open stand-alone Levi's stores, Dockers stores, and discount stores for both brands in the United States. Levi Strauss continued to expand its foreign markets, moving into Eastern Europe and expanding sales in India, for example. The company believed that the American market would continue to grow as well. The trend toward casual dress by office workers seemed to be increasing--according to one study, 90 percent of U.S. office workers were allowed to wear casual clothes to work on Friday by the mid-1990s. As jeans became more accepted in the white-collar world, the market for Levi's was expected to widen.

Further Reading

Cray, Ed, Levi's: The "Shrink to Fit" Business That Stretched to Cover the Whole World, Boston: Houghton Mifflin Company, 1978.

Everyone Knows His First Name, San Francisco: Levi Strauss & Co., 1985.

Lenzner, Robert, and Johnson, Stephen S., "A Few Yards of Denim and Five Copper Rivets," Forbes, February 26, 1996, pp. 82-87.

Mitchell, Russ, "Managing by Values," Business Week, August 1, 1994, pp. 46-52.

Munk, Nina, "The Levi Straddle," Forbes, January 17, 1994, pp. 44-45.

Teitelbaum, Richard S., "Companies to Watch," Fortune, February 8, 1993, p. 127.

— Elizabeth Rourke; Updated by A. Woodward

Founded in San Francisco in the mid-19th century, Levi's have been seen as one of the most powerful and evocative American brands in the international market place. This outlook has been bolstered by such factors as the Smithsonian Institution's absorption of Levi's products into its permanent collection in 1964 and Levi Strauss & Co.'s (LS&C) adoption as the official outfitter for the US Olympics in Los Angeles twenty years later. Ten years later Fortune, the American business magazine, also named Levi Strauss & Co. as the most admired clothing company. Sustained by effective marketing strategies over a long period of time LS&C has secured a historical niche as an original maker of strong, denim working clothes, first patented in 1873. By the early 20th century they were marketed as being ‘positively superior to any made in the United States’, ‘sewed with the strongest thread’, and ‘original riveted clothing’. The company's highest profile product, the 501 jeans, was first named in the 1890s. The company's visual identity—the ‘two horses’ motif—also gave off an aura of rugged, specifically American, practicality. It incorporated two cowboys driving horses in opposite directions, a pair of jeans being stretched between them as a means of demonstrating the strength of material, thread, and rivets. Since 1928, when Levi's first registered its trademark, the brand has also been successfully identified with America's Wild West heritage and, like Coca-Cola or Marlboro cigarettes, has become an internationally recognized symbol of core American values. During the 1930s such a portrayal was a strong element of corporate advertising, echoed in the cowboy heroes in Hollywood films. Lady Levi's were introduced in 1935 and were sold alongside 501s, rodeo shirts, and other Western wear. In 1912 the company had also launched its Koverella one-piece playsuit for children, sold nationally from 1920 when a new LS&C factory was established in Indiana. After the Second World War the company maintained the international exposure that it had gained as far back as 1915 when it received an award for its jeans at the Panama Pacific International Exposition in San Francisco in 1915. At the Brussels International Exposition of 1958 (Expo '58) Levi's jeans were exhibited in the American Pavilion, as they were in the following year at the American Fashion Industries' Presentation in Moscow. However, there was a diversification of outlook with the introduction of the Lighter Blues and Denim Family sports range in 1954. There was also some identification with rock 'n roll, with Jefferson Airplane and Paul Revere and the Raiders making radio commercials for Levi's in 1967 and the introduction of bell-bottom jeans in 1969. During this period LS&C's penetration of export markets was bolstered by the establishment of Levi's Europe in 1962 and Levi Strauss Japan in 1971. A number of other company brands were introduced, including Dockers, first appearing in 1986. A decade later, in 1996, the company explicitly marketed its own history with the international introduction of Levi's Vintage Clothing for the reproduction of earlier items drawn from the company archives. This sense of historical significance was further bolstered by the celebrations of the 130th anniversary of the company's patent for blue jeans in 2003.

• Founded: by Levi Strauss (1829-1902) in the 1850s.
• Company History: Levi Strauss arrived in San Francisco in 1853, and began selling dry goods to gold prospectors. Strauss made and sold "waist-high overalls" out of material originally intended for sale as tent canvas; rivets used to reinforce seams and pockets, 1873; company passed to four nephews after Strauss' death, 1902; beige twill introduced, 1960s; corduroy jeans introduced, 1961; stretch jeans and Sta-Prest® slacks introduced, 1964; womenswear introduced, 1968; began manufacturing and marketing in Hong Kong, early 1970s; company went public, 1971 (family members retained controlling interest); official outfitters of U.S. Winter and Summer Olympic teams, and Los Angeles Olympic Games staff, 1984; publicly-held shares repurchased by family members, 1985; casual Dockers line of pants introduced, 1986; Slates dress slacks first marketed, 1996; Original Spin, custom jeans program, initiated 1998; first nonfamily member CEO takes reins, 1999; jeans and jackets with "wearable electronics" marketed in Europe, 2000.
• Collections: Smithsonian Institution, Washington, D.C.
• Awards: Coty Special award, 1971.
• Company Address: 1155 Battery Street, San Francisco, CA 94111, USA.
• Company Website:www.levistrauss.com.

Levi's are an American icon; people of all ages, from countries as diverse as Japan, Russia, and the U.S. wear Levi's, buying them new or used. They are valued for both their enduring quality and wide array of designs.

Levi Strauss & Company was established in the 1850s in San Francisco, California, to sell the finest domestic and foreign dry goods, clothing, and household furnishings. Levi and his brothers Jonas and Louis as well as two brothers-in-law, William Sahlein and David Stern, ran the company. They had a ready market for their wares in the goldminers, cowboys, and lumberjacks, who had moved West to make their fortunes. Especially popular were the company's sturdy pants that stood up to the rugged work.

The pants were further improved thanks to Jacob W. Davis, a tailor who lived in Reno, Nevada. Davis sewed horse blankets, wagon covers, and tents from an off-white duck cloth bought from Levi Strauss & Co. He also made work clothes, though the miners and cowboys complained about pockets ripping off. As a result he tried riveting the pockets on the pants with the same copper rivets he used to attach straps to horse blankets. Davis made more riveted trousers using a 10-ounce duck twill and, by word-of-mouth advertising, a steady business grew.

Davis could not finance the patent necessary to protect his idea so he offered Levi Strauss & Co. half the right to sell all such riveted clothing in exchange for the $68 patent fee. The patent was granted to Davis and the Levi Strauss company on 20 May 1873. Levi Strauss & Co. soon made and marketed trousers, vests, and jackets using the rivets at stress points. White and brown duck twill and denim were used in the trousers Strauss called waist pantaloons or overalls, not "jeans."

The term jeans referred to trousers constructed from a fabric woven in Genoa, Italy, or "Genoese" cloth, while denim was derived from "serge de Nimes," or cloth from Nimes, France. The fabrics were all shrunk to fit as a snug fit was desirable because wrinkles caused blisters when riding in a saddle. Suspender buttons, two in back, and four in front were used. There were no belt loops, though cinch straps and a buckle were sewn onto the back of the trousers to tighten the waist.

Strict price and quality standards were established at Levi Strauss, and fabric was furnished by Amoskeag, a New England mill. Orange linen thread was used for stitching because it matched the copper color rivets, and two curving Vs were stitched on back pockets to distinguish the Levi pants from those of competitors (this arcing row of stitches, however, did not become a registered clothing trademark until 1942). An oilcloth guarantee with the "Two Horse Brand" was tacked to the seat of the trousers. It had an engraving of two teamsters whipping a pair of dray horses trying to pull apart riveted trousers.

In 1886 a leather label with the two horse logo was permanently affixed with orange linen thread, and due to the quality of manufacturing and fabric, Levi Strauss was able to charge more than its competitors. The original XX 10-ounce denim trousers were known as the 501, and became the hallmark to be measured against. Levi's, as they became known, were functional, simple and above all durable.

The company grew and evolved to meet changing economic and societal needs brought about by world wars, the Depression, and unionization of the labor force. Clothing was sized to fit children as well as women; linen thread was replaced with a fine gauge version of the cord used to stitch shoes to make seams stronger, belt loops replaced suspender buttons on the original 501 design, the cinch belt was removed, 13.5-ounce denim came into use, a zipper fly was introduced, preshrunk fabric became the norm, and the red Levi tag was added to further distinguish the jeans from the competition. New lines of more dressy yet casual clothes were also introduced, such as Dockers and Slates.

The mystique and marketability of Levi's received a boost throughout the 20th century when worn by men and women with high profiles. James Dean wore Levi's in Rebel Without a Cause, and Marlon Brando was similarly outfitted in the Wild One. Director Steven Spielberg and software mogul Bill Gates both appeared frequently in jeans, while the corporate world's casual Fridays and even former President Bill Clinton have given Levi's both exposure and status.

Yet during the 1990s the market was inundated by branded jeans, from popular designers such as Calvin Klein, Ralph Lauren, Tommy Hilfiger, Dolce & Gabbana, Donna Karan, and many others, as well as store brands like Gap and Old Navy. Though Levi Strauss marketed a myriad of styles—from boot cut to flare to "loose" or wide-legged pants to stretch—distribution problems, discounters, and a weakened textile industry contributed to a serious loss in market share. To combat the slump, the company initiated a series of hip print and television ads, some with winning results. The introduction of the computerized Original Spin program in 1998, to help create the perfect custom-made pair of jeans, also brought a new market segment to the Levi's fold.

In the 21st century Levi's remain a staple in the wardrobes of many consumers worldwide, yet the company's overall sales and profits continued to slide. Japan and the U.S., once the company's strongest markets, were sadly lacking in 2000 and 2001. On a more positive note, the company acquired an original pair of work pants made in the early 1880s (probably sold for about $1 at the time) for more than $46,500 in 2001, from the eBay auction site. Additionally, the home of company founder Levi Strauss was restored and opened for touring in San Francisco.

The jeans of Levi Strauss & Co. will never go out of style and have achieved an iconic stature in the U.S. and around the world. For its part, the Levi Strauss company has created dozens of styles and variations of its stalwart products to transcend trends. More recent innovations included ergonomically engineered jeans as well as Levi's with built-in gadgets such as MP3 players and voice-activated cellular phones. Levi's—originally intended for use by goldminers and cowboys—have become an integral part of the American way of life. Yet as the world's number-one manufacturer of branded clothing, Levi Strauss is a name known and beloved in more than 80 countries.

Publications

On Levi Strauss & Co.:

Articles
• Kurtz, Irma, "Levis: Not So Much a Pair of Pants, More a Nation's Heirloom," in Nova (London), September 1970.
• Willat, N., "The Levitation of Levi Strauss," in Management Today (London), January 1977.
• "Levi Strauss & Co.," in American Fabrics & Fashions (New York), No. 109, 1977.
• "Market Manipulation: The Levis 501 Experience," in International Textiles (London), July 1987.
• "Denim: Is the Party Over?" in Fashion Weekly (London), 14 January 1988.
• Bradley, Lisa, "A Modest Success," in Fashion Weekly (London), 14January 1988.
• Simpson, Blaise, "Levi's Makes Push in Women's Wear," in WWD, 2March 1988.
• Rowlands, Penelope, "Vintage Power: Levi's," in WWD, (London), 10 February 1992.
• Elliott, Stuart, "The Media Business: Levi's Two New Campaigns Aim at Who Fits the Jeans," in the New York Times, 27 July 1992.
• Magiera, Marcy, and Pat Sloan, "Levi's, Lee Loosen Up for Baby Boomers," in Advertising Age, 3 August 1992.
• "Fashion Statement," in San Francisco Business Magazine, October 1992.
• Elliott, Stuart, "The Media Business: Going Beyond Campaigns and into Sales and Marketing," in the New York Times, 18 November 1992.
• Ellsworth, Jo, "Engineering a Revival for Levi's," in Marketing (London), 19 October 2000.
• Kastor, Elizabeth, "Smarty-Pants Pants…and Shirts," in the Washington Post, 28 December 2000.
• Skolnik, Lisa "Once and Again American Ingenuity Puts a New Spin on Classic Designs," in Chicago Tribune, 15 April 2001.
• "Levi Strauss Reacquires A Pair of Jeans, at Markup," in the Wall Street Journal, 29 May 2001.

— Nancy House; updated by Owen James

Levi Strauss & Co

Type	Private
Founded	1853 (1853)
Founder(s)	Levi Strauss
Headquarters	San Francisco, California, U.S.
Area served	Worldwide
Key people	T. Gary Rogers Chairman of the Board John Anderson President and CEO
Industry	Clothing
Products	Jeans
Owner(s)	Descendants of Levi Strauss
Employees	10,000+
Divisions	Levi's, Dockers, Signature by Levi Strauss & Co.
Website	Levi 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.

Contents 1 Organization 2 History 2.1 1990s and later 3 Advertising 4 Notes 5 References 6 External links

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.^[1]

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 stoned washed jeans through the acquisition of Great Western Garment Co. (GWG), a Canadian clothing manufacturer, acquired by Levi's. 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 n 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 Hass 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 into its press plants, which were known in the industry to be notoriously hot, for the comfort of Levi's workers.

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.^[2] The Dockers brand, launched in 1986^[3] which is sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Levi Strauss attempted to sell the Dockers division in 2004 to relieve part of the company's $2 billion outstanding debt.^[4]

Launched in 2003, Levi Strauss Signature features jeanswear and casualwear.^[5] 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.

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 1930’s, 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.^[6]

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 was related 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.^[7]

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, most Levis jeans are made overseas, but some of the more expensive, high-end designs 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 US labor history, distributing more than $9 million in restitution to some 1,200 employees.^[8][9][10] 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 Latinas^{[citation needed]}) — some of whom had worked for Levi Strauss for decades — saw their jobs exported to Costa Rica.^[11] 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.^[12][13][14]

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.^[15] 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.^[16] 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.^[17] 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).^[18] Levi's has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies.^[19]

By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years.^[20] Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s.^[21] After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007.^[22]

Advertising

This section requires expansion.

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 the use of songs by 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?") Many lesser know songs 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 TV 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-popularised 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
"The Joker"	Steve Miller Band	1973	1990	1
"Mad about the Boy"	Dinah Washington	1952	1992
"Inside"	Stiltskin		1994	1
"Boombastic"	Shaggy		1995	1
"Spaceman"	Babylon Zoo		1996	1
"Flat Beat"	Mr. Oizo		1999	1

Notes

1. ^ Levi's (Europe)
2. ^ http://www.conestogac.on.ca/~sfinlay/IMC/cases/LevisGWG.htm
3. ^ Dockers.com
4. ^ Levi's tries to polish Dockers image / New ad campaign aimed at attracting women customers
5. ^ Levi Strauss Signature (R) - Stylish fits and finishes with a heritage of craftsmanship and quality
6. ^ Carin C. Quinn, "The Jeaning of America—and the World", American Heritage 29(3), April/May 1978.
7. ^ 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)
8. ^ May 1998, Case file Levi Strauss & Co
9. ^ Weekend Standard - The island that lost its shirts
10. ^ 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
11. ^ Fuerza Unida
12. ^ Fuerza Unida
13. ^ Fuerza Unida, Mujer a Mujer: Firsthand Account of Levi's
14. ^ FUERZA UNIDA 710 New Laredo Hwy
15. ^ Levi Strauss & Co. - Financials
16. ^ James Sterngold (June 13, 1996). "Levi Strauss Offers To Pay A Dividend To Workers". The New York Times. 
17. ^ Supply Chain Partnerships: How Levi's Got Its Jeans into Wal-Mart - CIO.com - Business Technology Leadership
18. ^ Latest Status Info
19. ^ Levi’s Turns to Suing Its Rivals - New York Times<
20. ^ http://www.mercurynews.com/businessheadlines/ci_6346739
21. ^ Levi Strauss earnings rise 61% in 1st quarter - Los Angeles Times
22. ^ Marketplace: Levi's may be dressed up to go public

References

• Ford, Carin T. (April 2004). Levi Strauss: The Man Behind Blue Jeans (Famous Inventors). Enslow Publishers. ISBN 0-7660-2249-8. 
• Roth, Art. The Levi's story. 
• Van Steenwyk (June 1988). Levi Strauss: The Blue Jeans Man. Walker & Company. ISBN 0-8027-6795-8. 

External links

• Corporate site
• Official site
• Levi Strauss Signature
• Levi's Mobile Phone official site
• Levi's Project 501 Design Challenge
• Levi's Sponsorship of Project Runway

Companies portal

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