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The birth of denim Who would have thought that good old American blue jeans would have their start in Buttenheim, Bavaria? At least that's where Levi Strauss got his start. He immigrated to America in 1847, and moved to San Francisco six years later to start a dry goods business. Tipped off by a gold rush prospector, Strauss began selling sturdy canvas pants to miners. By the 1860s, he was making the pants out of a French fabric called serge de Nimes (later known as denim) dyed with indigo. In 1872, Strauss paired up with Jacob Davis, a Nevada tailor, and began making "waist overalls" reinforced with copper rivets so that miners could stuff their pockets with rocks, tools, or whatever heavy material they chose to carry (gold?). From cattle ranchers to gold-diggers, Westerners were soon clamoring for the rugged denim wonders. Walter and Peter Haas, fourth generation Strauss descendants, took over the company in 1948. Under their tenure, Levi's attained ubiquitous status on the butts of baby-boomers across the country. Cashing in on what seemed like limitless growth, the Levi family shareholders went public in 1971. But though Levi's were all the rage in the classic 1950s and dress-down 60s, sales hit a decline in the 1970s, as Levi's faced competition from trendy designer jeans like Guess?, Sassoon and Sergio Valente. Conditions continued to worsen until Robert Haas, the founder's great-great-grandnephew, was appointed CEO in 1984. He took the company private again the following year, in the largest leveraged buyout in the apparel industry. Under Haas' guidance, Levi's began narrowing its focus to a core product line of jeans, jean-related apparel, and casual sportswear. In 1986, Levi Strauss introduced Dockers, a line of casual pants that soon became the market leader in yuppie weekend wear, and cashed in on the growing "business casual" movement. Levi Strauss & Co. launched the first Original Levi's Stores in the US in 1991. Though it consistently posted record sales figures in the early 1990s, the company found its market share slipping in the face of tough competition from Tommy Hilfiger, DKNY and others. In 1994, the company introduced the "Personal Pair" program, which offered custom-fit jeans for women at Original Levi's Stores across the country. Two years later, it launched Slates dress slacks, Levi's first new brand in ten years. Apparel's stumbling giant In 1996 the company bought back close to one-third of its stock from family and employees to the tune of $4.3 billion, resulting in $3.3 billion in debt for the troubled company. In 1997, after years of strong growth, the company reported that worldwide sales had dropped by 4 percent from $7.1 billion to $6.9 billion. Strapped with debt from the buyout, the company was forced to close 11 of its 37 North American plants in 1998. That translated into layoffs of nearly 6400 workers, or 34 percent of the company's total manufacturing workforce in the U.S. and Canada. The company did, however, provide $200 million in employee benefits for those laid off; and the Levi Strauss Foundation donated $8 million in grants to communities affected by the plant closings. Meanwhile, the company witnessed the erosion of its overall share of the U.S. jeans market from 16.5 percent in 1997 to 14.8 percent at the end of 1998; and sales fell 13% for the 1998 fiscal year. In January 1999, President/COO Peter Jacobi retired after 28 years with Levi's. One month later, the company announced that it would close 11 more of its remaining North American plants, and shift manufacturing to contractors in other parts of the world. By March 2000 Levi's had closed 24 plants and five finishing facilities, spending $3 billion on severance. An attitude adjustment Levi Strauss & Co. is the leading seller of name-brand apparel in the US, and the number two seller of jeans, just behind the VF Corporation's Wrangler and Lee jeans. But while the company has admirably covered the yuppie set with Dockers, the industry consensus is that Levi's dropped the ball with today's 16- to 24-year-old crowd. In particular, the company seemed to be asleep at the switch while smaller but well-capitalized competitors like Tommy Hilfiger, DKNY, The Gap, Mudd, Paris Blues, LEI, JNCO, and Fubu snuck in and snatched away younger customers. To stem the flow, Levi Strauss has worked on new products, such as the trend-chasing Massive Jean, featuring 23-inch-wide legs. Its series of "hard" jeans has enjoyed success, and Levi's hopes for similar results from a new brand, known as "Red Line," offering products evoking the tough miner jeans of the wild frontier. New "engineered jeans" with larger pockets and twisted seams, available at select stores, have been hugely popular and will be made widely available at the end of 2000. Additionally, the company is trying to infiltrate young people through their ear-holes. It sponsored 1998's Lilith Fair music festival, Lauryn Hill's first Worldwide tour, and MTV's Video Music Awards. Hunting down Generation Y The company has also changed its business approach. Chief Marketing Officer Gordon Shrank has set forth some new goals, in particular focusing more on marketing than manufacturing. Commenting generally on the new strategy, CMO Shank told The Daily News Record: "If we go back in time, what made Levi's successful is that we resonated with consumers. We need to re-create that passion around the consumer, that focus on the end user." Accordingly, the company has stepped up marketing efforts. Notably, in August 1999, the company converted its San Francisco store into a teen "hangout" complete with a DJ, art galleries, and several new services. Among these are a new customization area (where customers can personalize their jeans with embroidery, heat transfers, paints and other ornaments); a service called "Original Spin" (which uses 3-D technology to take measurements and help customers choose the perfect pair); and "The Shrink-to-Fit Experience" (which involves a 10-minute dip in a hot tub with jeans on, and a visit to the "Human Dryer." One thing Levi's is not doing to reach a broader range of customers is sell jeans on its web site. The company had been engaging in online sales, but ceased in 1999, instead directing customers to Macy's or JC Penny's web sites. Robert Haas gave up the CEO post in September 1999. He was replaced by Philip Marineau, former President/CEO of Pepsi's North American division. Marineau is only the second man not descended from Levi Strauss to lead the company, but has succeeded in slowing losses. The company's debt is down to $2.3 billion, though sales are still deteriorating. The U.S. and European sales are slipping but seem to be stablizing, and sales in Asia are on the rise. "Make Them Your Own" In July 2000 the jeans company decided to make Levi's hip again. Responding to its declining popularity among the core audience of young adult consumers, many of whom had flocked to brands like the Gap and Tommy Hilfiger, Levi's planned its first advertising campaign in nearly 20 years for corduroy pants. The print and television ads, which comprise the company's most aggressive marketing effort in years, are part of CEO Marineau's focus on younger consumers.
Levi Strauss' company web site, www.levistrauss.com, provides extensive employment information, and allows candidates to peruse job openings by department, cut and paste resumes, or submit questions and comments to company's human resources department. Job seekers can also call the company's "external" hotline at (415) 501-JOBS. Though qualifications vary by position, being a team player is a must. One insider says: "I suggest adding to your resume any extra activities that demonstrate you being a risk taker, a project manager, a team player, etc. Being a member of a team is important here. Interpersonal skills are very important. Creativity is nice, but if you cannot communicate and work with members of a team with different opinions you probably will not make it." Regarding hard skills, one insider reports, "Though departments vary, basically, we look at your track record. Just being a good student is not enough. We have different types of jobs. As the salary goes up so does the experience and skill requirement." High-tech know-how is a particular plus, as one insider notes, "These days, it's critical that employees have a familiarity with technology, and feel at ease using it. Our dependence on, and use of technology is ever increasing." As for interviewing, one reports, "The interview process frequently starts with an initial screening interview by a Human Resources person. If the HR person thinks there may be a fit, they pass the candidate on to an interview panel, which usually consists of the hiring manager and several other folks in the business unit (possibly managers or potential co-workers). While the numbers vary, there may be as many as five to six people on the panel."
Tremendous job satisfaction Working at Levi's is as comfy as your favorite pair of worn-in jeans, most employees agree. Insiders deliver nearly unanimous praise for the jeans maker, and say it lives up to the much-trumpeted "corporation with a heart" reputation, in spite of the firm's recent downsizing. One longtime Levi employee says: "I think that you will find that Levi Strauss & Co is a great company because of what it stands for as well as its products. I enjoy the corporate culture and its values. Personally speaking, it's a great place to work." Another insider notes, "Working for the leading symbol of American fashion makes us the hit of every party." Uneasy with restructuring Levi Strauss employees are understandably nervous about some of the restructuring going on at their company. One tells us: "It is a difficult time for Levi Strauss & Co. right now. There is a lot of restructuring going on and morale is at an all time low." Another acknowledges the company's unsettled situation, but somehow that killer job satisfaction manages to seep through: "While we have been going through some rocky times the past few months, I think that we are one of the best companies to work for." The same contact explains: "the only thing I would say that might be bad is that our size makes it very difficult to respond very quickly to changes in the market place. Additionally, in the past 10 years we have had great success and now that we are in a downturn, tensions are a little high because no one is used to this." Pay and perks are anything but blue Insiders deliver high praise for perks and pay at the blue jeans giant. "My experience with compensation has been very satisfying." Our contacts note yearly pay raises, profit sharing, long term incentive plans, 50 percent match on 401(k), and bonuses. Another employee reports: "Pay is 3 percent above competitors' wages for the same job, benefits are extremely good, hours are not very bad (40-50 hours/week), the work environment is professional but not hard-core (you can wear jeans to work, for obvious reasons), and they are very minority-friendly." Practicing what it preaches in the diversity department "Diversity is one of our strongest assets," one employee reports. "The 'glass ceiling' or 'boy's club' certainly does not exist here," another says. One 16-year Levi veteran notes, "The company is very, very EEOC, minorities-aware, and most of all, it backs AIDS research." Another notes, "I personally have reported to people from a variety of ethnic origins. I have had the pleasure of working with people from numerous cultures, religious affiliations, and sexual preferences in San Francisco and in several countries around the world. My experience is that employees are judged by their contribution. I would also add that in order to be competitive we must seek diversity from within because our customers themselves are diverse." Such comments reflect Levi's acclaim-winning diversity initiatives.
Human Resources (415) 501-7828
Dockers (casual slacks, dress slacks, shirts);Levi's (casual apparel, jeans); SLATES (dress pants)
Calvin Klein;The Gap;Guess?;Tommy Hilfiger;VF;The Limited More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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