CORPORATE STORY ON

“Levi’s”

Presented By TEAM

Manendra Shukla

Introduction

• Levi Strauss & Co. (LS&CO.), one of the world's largest apparel manufacturer brand

• Sold in over 110 countries, in more than 55,000 retail locations worldwide

• Manufactures jeans in approximately 108 sizes and 20 finish fabrics

• 3 Brand Portfolio - Levi’s ®,Dockers ® & Levi’s Strauss

Mission statement

“The mission of Levis Strauss & Co. is to sustain responsible commercial success as a global

marketing company of branded apparel.”

• Vision Statement

“When LS & Co. describe the future of Levi they are talking about a building on the foundation they have inherited: affirming best of

their Company’s tradition, closing gaps that may exist between principles and practices and

updating some of their values to reflect contemporary circumstances.”

History

• The company was founded by Levi Strauss in 1853 primarily selling wholesale dry goods. The company was founded in San Francisco,

California.

• A tailor named Jacob Davis thought of an idea to use copper rivets to reinforce the points of strain on pants.

• Davis and Strauss purchased the patent of the idea of using copper rivets in clothing on May 20, 1873.

History Cont…….

• The innovation of the rivets in the jeans differentiated Levi’s jeans from others because of its increased durability.

• Over the years, Levi Over Levi’s jeans have become more popular, initially due to its durability. Jean products expanded, targeting different consumers.

• Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974.

TimeLine

• 1853: Levi Strauss begins selling dry goods in San Francisco• 1873: Levi Strauss & Co. patent riveted jeans and begin selling them.• 1912: Koveralls, denim play suit for children, is first nationally sold product for the company.• 1935: Company sells first blue jeans for women.• 1940s: U.S. government issues denim work clothes for

employees in the defense industry.• 1974: Company sales reach $1 billion1974: billion.• 1986: Company introduces Dockers as a new casual line of

clothes new clothes.

LOGO 

• In 1886 the Two Horse ® brand leather patch, a symbol of the pants Showing Strength in jeans. • The Levi's® brand eye-catching Red Tab Device was added to the jeans in 1936. Placed onto the right back pocket with the word "Levi’s®" White capital letters, it differentiates Levi's® jeans from competitors. • Levi’s® jeans famous arched back pocket stitching is called the “accurate.”

• Why choose Levi’s for the Corporate story?

HUMAN RESOURSE MANAGEMENT

HR Policy

• Recruitment & Selection• Training• Rewards & Recognition• Red Tap Foundation• Other benefits and facilities

Denim Pants Non-Denim Pant

Shirts Jackets Others(Foot Wear,Eye Gears,Caps,Belts,Leather Wallets,Carry Bags,Sweaters)

Levi’s Dockers Dockers Levi’s Strauss Signature

Levi’s 501 Levi’s Strauss Signature

Levi’s Strauss Signature

Levi’s Engineered Jeans

Other

Product PortfolioBr

and

Portf

olio

Performance

Market and Competition• Market Share

Brand 2000 1996 1991

VF(lee and Wrangler) 25.3 24.5 17.9

Private Labels 20.2 22.1 3.2

Levi’s 17.0 18.7 31.0

Licensed/Designed labels 7.0 5.2 3.7

Gap(Gap, Banana Rep, Old Navy) 4.9 4.2 2.7

GWG 2.0 2.5 4.5

All Other 23.6 22.8 37.0

• Net Sale by Region

2001 2002 %Change

Americas 2,859 3148.2 9.2

Europe 1111.8 1104.5 0.7

Asia 372.7 392.4 5.0

Total company 4344.0 4645.1 6.5

OPERATIONS

The first two steps in blue jeans manufacture are carding and spinning. In carding, the cotton is put through a machine with bent wire brushes.

How Manufacturing  is being done?

Steps in manufacturing: -

2. Dyeing the yarn

3. Weaving the yarn

1. Preparing the cotton yarn

4. Making the blue jeans

Supply Chain

What a Green Sustainable Supply Chain?

As the public becomes more aware of environmental issues and global warming, consumers will be asking more questions about the products they are purchasing. Companies will have to expect questions about how green their manufacturing processes and supply chain are, their carbon footprint and how they recycle.

Marketing

• Levi’s has maintained its equity worldwide. A mix of standardization & localization in Levi’s

products has enabled the company to become a renowned brand worldwide.

• Levis use Differentiated marketing because it has multiple marketing mixes i.e. it involve multiple products, targeted towards multiple

segments.

Marketing Objectives• To improve leadership market positions and superior product and services.• To maintain and protect the global brand.• Increase the market share in products by annual

average of 2.8% in the next 5 years.• Also, to maintain the global market share of denim product in the same period.

 

POSITIONING     

• Levi Strauss & Co. maintains it’’s image as an American Icon and the originator of American jeans.

• In 1930s, the company survived the Great Depression due to increased interest in Western culture.––Jeans were positioned as being worn by “cowboys..”

• Levi’’s jeans were issued to employees in the defense industry (including veterans) during World War II • WWII veterans were regarded as heroes.–– • During the Baby Boom era, Levi’’s targets younger consumers and positions product

as cool.

Expensive

.U.K .Russia .Asia

Casual Prestige . Argentina . USA

Inexpensive

Product Features

• Comfort• Durability• Style

 DISTRIBUTION CHANNEL • LEVIS distributes JEANS by the Channel Members that is

through retailer and wholesalers.• Levi’s is using selective but intensive distribution level for the distribution of its products

Levis opened around 500 outlets at prime locations in India.

 PRICING• Levi’s all products are sold at listed price. • There is no discount to offer.

• Product’s price is influenced by the following factors:-1. Cost of the product2. Affordable for the target market3. Demand of the product 4. Uniqueness and innovative features of the products

 PRICING STRATEGY : LEVI’S STRAUSS: 

As Levi’s has different Products ranges for different segments the pricing strategy of LEVI’S can be Called as both penetrative as well as market growth pricing.

Pricing Strategy Cont…..

• Levi's came to India in 1995.

• The brand was trying to skim the market but at the cost of market share and volume.

• LS & CO. has tried to build its image as an innovator by coming in INDIA with their Jeans having new and latest style and look

• Levi’s India plans to vacate the middle price segment and plans to concentrate on the lower and the higher end.

Cont…….• In order to maintain revenues, the company releases

the Levi’s Signature Jeans • To differentiate Levi’s Strauss Signature ,the company developed new labeling and styles.• Levi’s launched new mid market brand-Denizen in India September 10,2010.• Providing EMI in Jeans

 PROMOTION &  ADVERTISING   • The advertisement given by the LEVIS stresses on the demand of the product and

enhancement of its features. • Levis uses institutional advertising to promote

company’s image by saying Many Copy the Red Tab No One can copy the Original.

Cont……• Advertisements of Levi Strauss & Co. are very innovative and eye-catching. Buyers are attracted towards the product.

• Television advertisements are more innovative and target younger crowds.

• Levi's launched "Friend's Store,"using a new Facebook tool.

150,000 fans on Facebook in India alone.

• Cont………… • In the US we have the Levi’s Guy and the Levi’s Girl on Twitter.

• On YouTube Levis released many of their TV commercials and also do specific small cameo ads.

• Levi's CURVE ID fit

• To mark its 15th anniversary in the India, apparel brand Levi's has announced

several initiatives titled 'Change Your World’'. • Chevrolet has joined Levi Strauss for

celebrating the latter's 15th year anniversary in India

BRAND AMBASDORS

• international denim brand Levis has signed Priyanka Chopra as their brand ambassador fImran Khan Replaces Shahid

Kapoor As Levis’ Brand Ambassador

• The company frequently promoted music & theatrical productions.

• Sponsored artists incl. Christina Aguilera, Mariah Carey, Ben Folds Five, The White Stripes etc.

• LEVI’S  competitors include Bugle Boy, Calvin Klein, and Fruit of the Loom, Guess, J.C Penny, Nike, J.Crew, Osh Kosh B’Gosh, Oxford Industries, Polo, GAP, Tommy Hilfiger, VF, & Warnaco Group.• Some of Levi’s competitors include:• High end consumers Calvin Klein Tommy Hilfiger• Low end consumers Miss sixty, Guess

• Competitive advantage

• Economies of scale,Levi is capable of implementing a cost leadership strategy within the company and the

environment, therefore, resulting in a competitive advantage • the company has accumulated knowledge and productive inputs. • This legacy allows Levi’s to promote the image of quality and value to their brand

• The brand image Levi’s encompasses results in them having a higher price tags compared to other brand Levi’s differentiates itself from all other competitors through the

ability to brand products through strong brand image

Strength

• History• Brand Name• Finance and Access to International Capital • Management• Expertise in Jeans Industries-R&D• Distribution Channels and Global Sourcing

Weakness

• High Costs of brand protection• Lack of control over quality(licensing) • Lack of control over distribution decisions(Retailers pressure to stop selling on the Web)• Distribution Conflicts(Large food retailers i.e. Tesco have been selling Levi products at lower price then standard, damaging other channels such as Levis Strauss stores)

Opportunities

• Arising of New Market such as Europe and Russia(to supply local demand) • Technological development lower production and coordination activities • Low Manufacturing and production costs in various international markets(i.e. Bangladesh)• Development in other industries such as electronic (MP3 player) could pass new opportunities for complementing new

Levi’s products. • Total Market for casual wear is growing

Threats

• Saturation of Jeans Market.• Economic Downturns in some countries.• Fast changes in Consumer tastes.• Local regulations on advertisement.• Lack protection of property rights in some countries such as China.• Increasing Competition from Gap,Guess,J.C.

Penny,Nike,Mochino,D&G,Osh Kosh,Oxford, Polo.

“LIFE BLOOD AND NERVE CENTRE OF BUSINESS”

FINANCE

BALANCE SHEETAmount in $ thousand Amount in $ thousand

2008 2009

Current Assets

Cash and Cash Equiv 210,812 270,804

Restricted Cash 2,664 3,684

Accounts Receivable, Net 546,474 552,252

Inventories 542,674 451,272

Deferred Tax Assets 114,123 135,508

Other Current Assets 88,527 92,344

Total Current Assets 1,505,274 1,505,864

Property, Plant and Equipment, Net 411,908 430,070

Goodwill  204,663 241,768

Acquired Intangible Assets, Net 42,774 103,198

Non Current Deferred Tax Assets 526,069 601,526

Other Assets 86,187 106,955

Total Assets 2,776,875 2,989,381

Current Liabilities: Amount in $ thousand Amount in $ thousandShort-term borrowings 20,339 18,749

Current maturities of long-term debt 70,875 00

Current maturities of capital leases 1,623 1,852Accounts payable 203,207 198,220Restructuring liabilities 2,428 1,410Other accrued liabilities 493158 506745Total current liabilities 791,630 726,976

Long-term debt 1,761,993 1,834,151Long-term capital leases 6,183 5,513Postretirement medical benefits 130,223 156,834Pension liability 240,701 382,503

Long-term employee related benefits 87,704 97,508Long-term income tax liabilities . 42,794 55,862Other long-term liabilities 46,590 43,480Minority interest 17,982 17,735Total liabilities 3,125,800 3,320,562

Temporary equity 592 1,938

Stockholders’ Deficit:Common stock 373 373Additional paid-in capital 53,057 39,532Accumulated deficit -275,032 -123,157

Accumulated other comprehensive loss -127,915 -249,867Total stockholders’ deficit -349,517 -333,119Total liabilities, temporary equity and stockholders’ deficit $2,776,875  $2,989,381 

Comparative Balance Sheet

Amount in $ thousand Amount in $ thousand

2008 2009absolute change % changeCurrent Assets

Cash and Cash Equiv 210,812 270,804 59,992 28Restricted Cash 2,664 3,684 1,020 38Accounts Receivable, Net 546,474 552,252 5,778 1Inventories 542,674 451,272 -91,402 -17Deferred Tax Assets 114,123 135,508 21,385 19

Other Current Assets 88,527 92,344 3,817 4

Total Current Assets 1,505,274 1,505,864 590 0

Property, Plant and Equipment, Net 411,908 430,070 18,162 4Goodwill  204,663 241,768 37,105 18Acquired Intangible Assets, Net 42,774 103,198 60,424 141Non Current Deferred Tax Assets 526,069 601,526 75,457 14Other Assets 86,187 106,955 20,768 24Total Assets 2,776,875 2,989,381 212,506 8

Current Liabilities:Short-term borrowings 20,339 18,749 -1,590 -8Current maturities of long-term debt 70,875 -70,875 -100Current maturities of capital leases 1,623 1,852 229 14Accounts payable 203,207 198,220 -4,987 -2Restructuring liabilities 2,428 1,410 -1,018 -42Other accrued liabilities 493158 506745 13,587 3Total current liabilities 791,630 726,976 -64,654 -8

0Long-term debt 1,761,993 1,834,151 72,158 4Long-term capital leases 6,183 5,513 -670 -11Postretirement medical benefits 130,223 156,834 26,611 20Pension liability 240,701 382,503 141,802 59

Long-term employee related benefits 87,704 97,508 9,804 11Long-term income tax liabilities . 42,794 55,862 13,068 31Other long-term liabilities 46,590 43,480 -3,110 -7Minority interest 17,982 17,735 -247 -1Total liabilities 3,125,800 3,320,562 194,762 6

Temporary equity 592 1,938 1,346 227

Stockholders’ Deficit:

Common stock 373 373 0

Additional paid-in capital 53,057 39,532 -13,525 -25

Accumulated deficit -275,032 -123,157 151,875 -55

Accumulated other comprehensive loss -127,915 -249,867 -121,952 95

Total stockholders’ deficit -349,517 -333,119 16,398 -5

Total liabilities, temporary equity and stockholders’ deficit $2,776,875  $2,989,381  212,506 8

INCOME STATEMENTAmount in $ thousand Amount in $ thousand

2008 2009

Net Sales $4,303,075 4,022,854

Licensing revenue $97,839 82912

Net revenues 4,400,914 4,105,766

Cost of goods sold 2,261,112 2,132,361

Gross profit 2,139,802 1,973,405

Selling, general and administrative expenses 1,606,482 1,590,093

Restructuring charges, net 8,248 5,224

Operating income 525,072 378,088

Interest expense -154,086 -148,718

Loss on early extinguishment of debt. -1,417

Other income (expense), net -1,400 -38,282

Income before income taxes. 368,169 191,088

Income tax expense (benefit) . 138,884 39,213

Net income $229,285 $151,875

Comparative Income Statement

2008 2009 absolute change % change

Net Sales $4,303,075 4,022,854 ($280,221) -6.51

Licensing revenue $97,839 82912 ($14,927) -15.26

Net revenues 4,400,914 4,105,766 ($295,148) -6.71

Cost of goods sold 2,261,112 2,132,361 ($128,751) -5.69

Gross profit 2,139,802 1,973,405 ($166,397) -7.78

Selling, general and administrative expenses 1,606,482 1,590,093 ($16,389) -1.02

Restructuring charges, net 8,248 5,224 ($3,024) -36.66

Operating income 525,072 378,088 ($146,984) -27.99

Interest expense -154,086 -148,718 $5,368 -3.48

Loss on early extinguishment of debt. -1,417 $1,417 -100.00

Other income (expense), net -1,400 -38,282 ($36,882) 2634.43

Income before income taxes. 368,169 191,088 ($177,081) -48.10

Income tax expense (benefit) . 138,884 39,213 ($99,671) -71.77

Net income $229,285 $151,875 ($77,410) -33.76

Ratio analysis

2008 2009

Net profit ratio 5 4

Gross profit ratio 50 49

Operating profit ratio 12.20 9.40

Current ratio 1.90 2.07

Corporate social Responsibility

“Each of us has a capacity to make business not only a source of economic, wealth but also a source for Social and Economic justice” ”

C.S.R cont…

• HIV/AIDS• Care Tags• Her Project• Eco Friendly• Donation & Grants

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