Premium Brand | Levi Strauss


Chip Bergh shares why he joined Levi Strauss. ‘The reason I joined Levi’s is that I’m a brand guy. I’m a marketing guy you know spent 28years of Procter & Gamble grew up in brand management.’

The Power of Branding

Transcript

The reason I joined Levi’s is that I’m a brand guy.
I’m a marketing guy you know spent 28
years of Procter & Gamble grew up in
brand management and then later you know
general management and ultimately my
last assignment there was running men’s
grooming which was importantly the
Gillette business which P&G had acquired
for fifty-seven billion dollars so all
eyes on that business and when I got the
call for Levi’s you know the first thing
my first reaction was WOW
you know here’s this amazing iconic
brand which I grew up in and I like to
say everybody’s got a Levi’s story so I
could you know immediately reflect on
some of those Levi’s moments in my life
and when I started doing homework on the
company I saw it was like the circle
didn’t square for me here you had this
incredible iconic brand one of the
strongest brands not just in the apparel
industry but anywhere and yet a company
that had really faltered for more than a
decade the history of Levi’s you know in
the 60s 70s 80s and early 90s it was a
rocket ship because it was America it
was Americana it’s it was everything
good about America and what America
stood for and so when the kids were
knocking down the wall in Berlin they
were all wearing Levi’s and everywhere
the company went and planted the Levi’s
flag the business took off as we
expanded the business globally then in
the mid 90s threw a perfect storm of a
number of things the business hit a wall
repeat the 95-96 at 7.1 billion dollars
in sales so 20 years ago 22 years ago
was our peak we were bigger than Nike
done and we went from 7.1 billion
dollars in sales to 4.1 billion dollars
in sales in five years and then the
company kind of bumped along over the
next decade plus you know one year the
sales would be up but profits would be
down next year the profits be up the
revenues would be down and kind of just
bounced along with really inconsistent
results so when I got the call the first
thing I thought was when an amazing
brand and there’s a pretty good saying
that you only got to leave P&G wants so
make a count
and I saw this as an opportunity to make
a difference to leave a legacy and I
talked about this as my noble cause of
making this company great again and by
the way that’s my line he stole that
from me but in some respects there are a
lot of similarity it is about the
consumer it is about the product at the
end of the day and connecting with
consumers so the brand-building parted
this which is my strength all that stuff
kind of came naturally and a big part of
our success now is because the brand is
resonating but I had an awful lot to
learn apparel is a lot different than
packaged goods you know when I was
working on Gillette we launched fusion
in 2006 the first product upgrade was 5
years later you know we’re changing half
of our line every six months so
thousands of SK use new every six months
and thousands disappearing at every six
months I also had to learn retail and
we’re a big retailer we have almost
3,000 stores around the world so there
were a number of aspects to this
industry and to this role to that was
new to me which I ultimately found
really really exciting I mean there was
a lot to learn but the big challenge was
how do you get this big huge aircraft
carrier we’re a big global company when
I joined the company we were not quite
four and a half billion dollars in sales
how do we get it turned around and
moving in the right direction and now
it’s been coming up on seven years and
you know our momentum has been strong
we’ve grown five years in a row on a
constant currency basis but the average
growth rates in those first four years
were 2 to 3 percent and we were doing it
profitably and so consistent reliable
growth helped create a lot of
shareholder value but then in the second
half of last year we saw an inflection
point our growth rates accelerated
fourth quarter of last fiscal year
double-digit growth and then we just
closed first quarter this year with 22
percent reported growth in the first
quarter so things are working now this
also comes at a time when consumers if
you look at the government statistics
consumers are spending less on a pair
overall there’s many more on experiences
they’re spending more on technology even
than they are on on clothing so how do
you how do you kind of manage that and
are there kind of any specific steps you
think you’ve taken over the past couple
years that have kind of led to where you
are – well I think we have something
going for us that nobody else has got
word the original we are the authentic
we are the original Blue Gene going back
almost 150 years now to the patented
riveted Blue Gene and there is
definitely a swing back towards
authenticity you know a lot of consumers
especially Millennials and Gen Z they’d
rather have fewer items in their closet
that are more versatile and that really
have lasting value you see this now in
the industry I mean H&M has now had
several quarters in a row of pretty bad
results I think consumers are starting
to wise up to the fact that fast fashion
it is just that you buy something it’s
cheap you’re wearing a few times you
throw it out and a lot of consumers is
saying I’d rather have a really quality
piece from Levi’s that’s gonna last me
long enough that I might even be able to
pass it on my kids one of the big
momentum areas in our business is
vintage you know how many brands are
there where you’re actually paying a
premium to what that product cost 25
years ago and there aren’t that many
brands that are like that and that’s one
of the things that we really have going
for us