Levi Strauss & Co.

• Date Founded: 1853
• Industry: Apparel
• Corporate Headquarters: San Francisco, California
• Type: Private

Overview

Levi Strauss & Company is a clothing manufacturer headquartered in San Francisco, California. The company was founded in 1853 by Levi Strauss, an immigrant from Germany. Levi Strauss & Co. is most famous for making denim jeans. Levi’s also produces other casual clothing, such as its Dockers trousers and Trucker denim jackets. Although the company originally made its products in the United States, by the 1960s, the popularity of its products led the company to set up offices and factories throughout Europe and Asia. Levi’s sells apparel around the world from its own chain of stores and outlets, through retail partners, and directly to customers via the Internet.

Levi Strauss never married; he worked closely with his family and left the company to four nephews upon his death in 1902. The company was run almost continuously by Strauss and his descendants until 1999. Since then, none of the company’s CEOs has been family members. The company is nevertheless largely owned and controlled by Strauss’s descendants. Levi’s is a privately owned company but was publicly held from 1971 until 1985, after which it returned to private ownership. Because the company has public bondholders, Levi’s regularly reports financial information to the US Securities and Exchange Commission.

From the outset, Levi Strauss & Co.’s mission has been to make high-quality garments, promote diversity in its workforce, and engage with wider society through philanthropy.

History

Löb (later Levi) Strauss left Germany for New York in 1847 and joined his half-brothers in their wholesale dry goods business. In 1853, Strauss moved to San Francisco to establish his own dry goods business as the population there swelled following the gold rush of 1849. With his brothers’ backing, Strauss quickly found a market in California and other western states for the general merchandise that his family shipped to him, such as fabric, thread, clothing, and blankets.

In 1872, Strauss diversified into manufacturing clothing. The move was prompted by a proposal from Jacob Davis, a tailor in Nevada. Davis introduced metal rivets to the design of sturdy work pants at the corners of the pockets and the bottom of the front closure, which made them last much longer. Davis and Strauss collaborated to patent and manufacture these unique and extremely popular "waist overalls," as they were known at the time.

Knowing that the patent would expire in seventeen years, Strauss created a distinctive brand identity for the pants to ensure the company’s dominance in the market well beyond 1890. Notably, a patch featuring a "Two Horse" logo plus the date the patent was granted, May 20, 1873, was sewn onto the pants’ waistband, declaring the products’ authenticity and making the brand easily recognizable.

Davis’s son, Simon, joined Levi Strauss & Co. and, in 1912, designed "Koveralls," which were durable playsuits for children. Koveralls were sold around the country and were Levi’s first product to be available nationwide. They were a huge success. Levi Strauss & Co. branched into women’s wear in 1934 by introducing "Lady Levi’s" jeans.

Over time, Levi’s tweaked the design of its jeans as styles and customers’ needs changed. Because few people wore belts in the late 1800s, the original pants featured buttons on the waistband to hold suspenders in place. In 1922, belt loops were added to jeans as suspenders fell out of fashion, and in 1954 the zipper was introduced as an alternative to the traditional five-button fly. The company started attaching a small red "Levi’s" tab to the back pocket in 1936 and trademarked the tab that same year. When customers complained that the cotton denim material shrank after being laundered, Levi’s began to preshrink the material to ensure the size of its jeans did not change with washing in 1960. Three years later, stretch denim and corduroy fabrics were used in addition to standard denim.

Levi’s Dockers brand trousers were launched in 1986 and immediately filled a niche by being more formal than jeans and less so than dress trousers. Because the dress code in many work environments was becoming more casual in the 1980s, sales of Dockers surged. It became among the most successful launches of a brand in the history of the American apparel industry.

As its apparel business grew, Levi’s discontinued its dry goods wholesale activities in 1948 to concentrate exclusively on making clothing. It ventured into other countries during the 1960s and formed new divisions dedicated to reaching markets outside of North America. During the early 1980s, Levi’s started opening its own stores in Europe. Only in 1991 did Levi’s expand from supplying retailers with its products to building stores of its own in the United States.

By 2011, the Levi's brand remained iconic, but sales had consistently been declining. Chip Bergh, a longtime leader of Procter & Gamble, was hired as the company's new CEO that year and immediately began making changes in executive leadership as well as business strategies to turn prospects around once more. Over the subsequent years, he led efforts to bolster the categories and offerings in women's apparel to appeal more successfully to that portion of the company's market, which had traditionally been underserved. He launched the Eureka Innovation Lab in San Francisco in 2013, bringing the operation to the United States for the first time to increase communication and efficiency with headquarters.

In 2014, as the company continued to experience improved revenues. Levi’s launched a sportswear line for fans of San Francisco’s professional football team, the 49ers, a concept it brought to clothing for other teams in the National Football League. In 2015, Levi’s joined Google as its first partner in Project Jacquard to develop a "conductive yarn." This innovative thread is designed to make fabric for clothing fitted with microchips that could be programmed to control electronic devices by, for example, the swipe of a sleeve. The "smart" jean jacket was released in 2017 to mixed reviews. Initially expensive, the jacket was later released at a lower price but faced criticism for limited features and durability issues, such as its fabric losing functionality after ten washes. Though marketed for cycling, Google and Levi's shifted focus, using the project to explore AI's utility and user acceptance rather than prioritizing being first to market.

Throughout the late 2010s and 2020s, Levi's continued to work to make itself more sustainable and modernize its manufacturing systems. In 2018, the company launched Project F.L.X., which digitized the jeans finishing process, thus removing the need to use many of the chemicals formerly used in that process to create worn or faded designs. The new process was developed at the company's Eureka Innovation Lab in San Francisco. During the COVID-19 pandemic that began in 2020, the company's sales rose due to consumers' increased demand for comfortable clothing during the pandemic.

In 2023, an effort to support sustainability, Levi’s announced, along with other brands, that the company was looking for ways to reduce the impact on water sources during the denim manufacturing process. The company has committed to reducing water consumption by 2050 through its "Water<Less" initiative, which focuses on using less water during the manufacturing of jeans. The company employed water-efficient techniques, including recycling water and optimizing production processes, to reduce water use, particularly in the finishing stage. Additionally, Levi's collaborated with cotton farmers to encourage more sustainable farming practices. By 2025, Levi's plans to have 80 percent of its factories and fabric mills certified as "Water<Less" facilities, adhering to strict water-saving guidelines.

In 2023, Levi’s remained a profitable, publicly-traded company. In the year’s first financial quarter, Levi’s beat earnings expectations though it warned margin declines were possible as the year progressed due to rising costs. Levi Strauss & Co. reported revenue of $6.179 billion in 2023, with a slight year-over-year increase of 0.17 percent and a net profit of nearly $250 million. For the twelve months ending August 31, 2024, the company posted $6.158 billion in revenue, reflecting a 0.53 percent growth.

Impact

The popularity of Levi’s jeans periodically ebbed. Despite occasional setbacks, the jeans nonetheless became an icon in American fashion. Though miners were the first group of customers to wear them, eventually college students and even actors in popular Hollywood Westerns adopted them and transformed Levi’s jeans into a status symbol.

When the United States entered World War II, the government pronounced Levi’s jeans to be an essential commodity and requisitioned all pairs for the exclusive use of military forces. As a result, US soldiers introduced jeans to other countries involved in the war. In Europe during the early 2000s, Levi’s jeans were considered high fashion and sold there at premium prices.

Levi Strauss & Co. has not been entirely free of controversy. For example, it was accused of neglecting to adequately oversee the manufacturing practices of a contractor in Lesotho that, in 2009, allowed chemical waste to leak and harm people and waterways in the area.

Levi Strauss instituted a tradition of philanthropy when he established the company. He personally donated to groups serving orphans, widows, and the poor. In 1897, Strauss funded twenty-eight scholarships at the University of California, Berkeley, which the company continues to underwrite. It formed Levi Strauss & Co. Foundation in 1952 to coordinate its donations. One noteworthy charitable cause was the financial support of medical treatment for victims of HIV/AIDS starting in the early 1980s when the epidemic first struck. As an employer, Levi Strauss asserts its commitment to creating a diverse workforce and promoting the general well-being of its employees.

Bibliography

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