LEVI’S 6-MONTH LEVI’S 6-MONTH LEVI’S 6-MONTH BUYING PLANBUYING PLANBUYING PLAN

TABLE OF CONTENTS

History

Overview

Mission Statement

Size Of Business

Target Customers

Sustainability

Merchandising Analysis

Levi’s in the Marketplace

Today’s Denim

The Millennial Customer

Competitors

6 Month Buying plan

San Francisco, California

King of Prussia, Pennsylvania

Trends

Assortment Plan

Statement Of Opportunity

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“WE BELIEVE THAT CLOTHES-AND HOW YOU MAKE THEM- CAN MAKE

A DIFFERENCE.”

Levi’s Strauss & Co. founded as a dry goods business after Levi Strauss moves to San Francisco

Levi Strauss and Jacob Davis take out a patent on the process of putting rivets on men’s work pants (making the first pair of what we now call jeans)

Levi’s legendary Two Horse logo signifying strength was born on a leather patch

Levi’s makes their first garment for women

Levi’s® becomes a trademark

Levi’s makes their first women’s jeans, revolutionizing the direction of the business

Business goes international

Introduction of Waste<Less and Water<Less jeans marks new path for sustainability

HISTORY

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1853

1873

1986

1918

1928

1934

1965

2013

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Levi’s is a company steeped in history and innovation. From creating the very first pair of jeans to leading the way in integrating sustainable practices into fashion products, Levi’s strives to be the denim industry leader in quality, design, and function.

OVERVIEW

MISSION STATEMENTThe culture of Levi Strauss & Co. Is fueled by strong values, creativity and hard work. Using innovative, sustainable and progressive practices isn’t just how we make our jeans and other products, it’s a principle we value in all of our work. We’re building on our heritage to move the company forward, to be as innovative and relevant to today’s consumers — and tomorrow’s — as we were when we invented the blue jean 140 years ago.

SIZE OF BUSINESSLargest American private company, one of the largest private companies in the fashion industry (owned mainly by descendants of Levi Strauss himself )

Market share of the denim industry

Billion sales in 2013

#83

12.5%

$4.6

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The Levi’s brand is built on the idea that it is universal, inherently American, and a family brand. To understand all of the different Levi’s customers, we can look at the typical American family.

TARGET CUSTOMER

Chris

Sidn

ey

Tom

my

Clar

e

Mag

gie

Scou

t

Meet the Jonhsons

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Dad Chris JohnsonAge 48

Married, working father of three children Loyal to the brand, drawn to fit and quality Middle Class, stable income Budgeted spending, Investment shopper Most likely leaves most shopping to his wife

Mom Sidney JohnsonAge 45

Married, working mother of three children Middle Class, stable income Budgeted spending, Investment shopper Brand loyalty and trust for the fit and quality, drawn to new fit flattering shapes

Adult Son Tommy JohnsonAge 22

Recently graduated, Single Lower, entry-level income Impulse Shopper Familiar with the brand, drawn to brand’s variety, price, and sustainability

Teenage Daughter Clare JohnsonAge 18

Senior in High School, Single Lower Income (Part-Time Job) for spending money Impulse shopper Drawn to the trendy options

Young Daughter Maggie JohnsonAge 10

Fourth Grade No personal spending money, decisions ultimately made by mom Drawn to the brand for trend and color options, while mom is drawn to the brand for quality and fit reasons

Dog ScoutAge 5 Companion Wishing Levi’s would make jeans for dogs so he wasn’t left out Has been know to regress by chewing holes in family jeans

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In an effort to be both a leader of innovation and a socially responsible company, Levi’s has put a new emphasis on sustainability and a responsible sourcing chain, winning them recognition as a pioneer in sustainability and ethics in both the denim and fashion industry as a whole.

SUSTAINABILITY

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This innovation lab, opened near the brand headquarters in San Francisco, has produced both fit and sustainability innovation. By 2015, Levi’s hopes that over 80% of its products will come out of the lab’s designs.

Waterless jeans

Eureka innovation lab

Wasteless jeans

These jeans utilize up to 96% less water than traditional denim practices.

This line of jeans is made with 20% recycled materials.

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Jeans Pants make up the bulk of Levi’s core business, representing about 86% of units sold. While jeans are priced anywhere from $48-$118, the average price for a pair of Levi’s jeans is about $75. This buying plan will focus on women’s jeans as a core category of Levi’s busi-ness. Women’s jeans are divided based on style.

MERCHANDISE ANALYSIS

Skinny

Legging

Boyfriend

Straight

Slim

Bootcut

Slim silhouetteSlim through the hip and thighSkinny leg

StretchyVery slim through the hip and thighSuper skinny leg

Sits below the waistRelaxed fit through hip and thighStraight leg

Sits on the waistComfortable through the hip and thighStraight leg

Sits at the waistSlim, but not too skinnySlightly tapered leg

Smooth bottomBoot cut legSlim through hip and thigh

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A CLASSIC SINCE RIGHT NOWLEVI’S IN THE MARKETPLACE

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Athleisure Trend

In 2013, sales of denim fell 6%, while sales of activewear grew 7%. This is one of greatest drops in the denim industry since it began (previously dropped by the rise of corduroys in the 70s and khakis in the early 90s).

The denim industry is worried this may be a more sustained loss, as it represents a lifestyle change.

TODAY’S DENIM

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Today, the Millennial customer outnumbers the baby boomer in both population and purchasing power, and all fashion brands have shifted their focus to attracting this new powerful consumer.

Live in Levi’s Levis’ new marketing campaign both emphasizes their long-standing history in the denim industry, while reaching out to this new customer. The campaign takes advantage of young creatives who are loyal to the brand and transforms them into brand ambassadors, in an attempt to, in the words of the new CEO Chip Bergh, ‘make the brand cool again’.

THE MILLENNIAL CUSTOMER

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At Levi’s, we believe that being educated on our competitors is equally as important as understanding our customers. Levi’s holds an interesting place in the market. From the beginning, Levi’s has provided good quality jeans at an accessible price. The denim market today has been flooded with both premium labels and bargain brands threatening to undercut our middle market status. By researching and understanding our competitors, we can better establish ourselves as the number one name in denim.

COMPETITORS

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Price Range: $30-$75

Customer Profi le: Bargain shopper, looking for quality at a lower price

Brand Identity: “Working Man’s Jeans”, known for durability and low prices

LEE

Price Range: $99-$129

Customer Profi le: Trendy, fashion customer, willing to pay higher prices for trendy options

Brand Identity: All-American, vintage inspired styles, known for a laid-back, “California” aesthetic

LUCKY BRAND

Price Range: $59.95-$74.95

Customer Profi le: Classic dresser, shopping for basics with a trendy fl air

Brand Identity: Lifestyle brand with high-quality basics for a middle market price

THE GAP

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SALES PLANIn 2013, for the first time in the past few years, Levi’s was able to turn a positive increase of 3.7% in profit and revenue growth. With this in mind, and taking into account that Levi’s is an established company and in a state of rebuilding, we have planned for a conservative growth plan of 5%.

REDUCTIONSBecause women typically view jeans as a basic in their closet, rather than a fashion item driven by trend, we planned for a modest reduction rate of 16%. Also, because Levi’s is a more established brand, they can afford to take fewer markdowns than other denim brands.

TURNOVER RATEInventory turnover is planned relatively modestly, reflecting a higher average stock and stock-to-sales ratio.

AVERAGE STOCKUnlike other fashion apparel that is driven strictly by trend, it is important in denim to have ample inventory in many sizes, washes, and styles. Therefore, our average stock is relatively high to account for this.

INITIAL MARKUP %Our initial markup percent reflect a low reduction percent, as well as relatively modest profit and expenses percents.

END OF SEASONBecause the end of July directly precedes back-to-school shopping, which represents a large chunk of denim business, we planned the month with a high stock-to-sales ratio, allowing for higher purchases to prepare for the upcoming season.

6 MONTH CORPORATE BUYING PLAN

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6 MONTH CORPORATE BUYING PLAN

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Levi’s Flagship Location815 Market StSan Francisco, CA 94102

Weather: February-May, Warm and Dry, High 70sJune-July, Cooler and Foggy, Mid-50s-60s

Population: 837,442

Brands/Services Carried: Levi’s, Made & Crafted Levi’s, Levi’s Vintage Line, In-house Tailoring Service

Store Plan

SAN FRANCISCO, CA

Because this location is considered the Levi’s flagship store and is in the Levi’s hometown, we expect this store to do as much as 6% of Levi’s total sales, representing almost double an average store’s contribution.

For the same reasons, we also sped up the inventory turnover, anticipating more customer flow and therefore a faster stock turn.

Because San Francisco generally gets colder toward the end months of the spring season, we planned accordingly, planning more sales towards these months and less sales at the height of spring heat.

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Levi’s, King of Prussia Mall690 W Dekalb Pike #1216King of Prussia, PA 19406Located 30 minutes drive from Philadelphia

Weather: February-April, Low 40s-60sMay-July, High 60s-Low 80s

Population: 19,936

Philadelphia Populations: 1.6 million

Brands Carried: Levi’s

Store Plan

KING OF PRUSSIA, PA

The King of Prussia location is based right outside of Philadelphia in a large, high-end mall which draws much of the Philadelphia population, ensuring a regular customer flow and sales plan. Therefore, we planned King of Prus-sia as an average store, making up about 3.33% of Levi’s total sales, with a slightly higher inventory turnover.

The population of King of Prussia tends to leave the city during the summer, traveling abroad and to their vacation homes, so we planned for a drop-off in sales through June and July. Sales peak in March and April, when the weath-er begins to get warmer.

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TRENDSWhen approaching trends, Levi’s must be very smart and selec-tive to choose trends that ultimately align with the brand’s values and aesthetic. While the company has lost sales before due to slow adoption of trends, Levi’s must also be careful not to tarnish a brand with such a long history by introducing trends that go against the 160-year old Levi’s style. Buying the wrong trends can alienate our loyal customers, who come to Levi’s for a classic look, as well as confuse potential new customers who are not as familiar with the brand identity.

This season, we see opportunity in the relaxed, distressed, and textured denim that is trending on the runway and in the street. By increasing our Boyfriend jean offering, and introducing new wash-es and denims that incorporate a distressed and patchwork look, we can expand our offering while staying true to the brand.

HOW LEVI’S DOES IT

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BOYFRIEND CUT

PATCHWORKING AND DISTRESSING

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As denim buyers, we need fi rst to establish a plan for buying spring’s denim styles. After looking at Spring 2015 trends, we decided to place more stock in the boyfriend cut while taking away units from the skinny and legging styles that have been popular for the past few years. Once this plan was set, it was important to establish the correct size break. Our size assortment plan works on a type of curve that assigns the most units to the most popular jeans sizes and assigns gradually lesser units to those farther away from these common sizes.

ASSORTMENT PLAN

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While Levi’s has been in a state of crisis and rebuilding in the past ten years or so, it has proven its ability to rebrand and recreate its product. This buying plan represents a modest growth from last year, and holds opportunity for even more sales growth to come. A number of factors can come together to create this opportunity, including the new Levi’s marketing campaigns in place, an emphasis on omni-channel retailing, a resurgence of the popularity of the classic Levi’s look, and products that both appeal to trends and the company’s brand identity. All of these factors, coupled with Levi’s sustainability initiatives, will work together to draw in new customers, creating an opportunity for sales growth in the upcoming season.

STATEMENT OF OPPORTUNITY

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“A COMPANY DOESN’T

LAST 160

YEARS BY

STANDING STILL”

6 MONTH BUYING PLAN FOR RETAIL BUYING SIMULATION

AT SAVANNAH COLLEGE OF ART AND DESIGN

RACHEL SCAFFE &

ELIZABETH ROSE