Levi Strauss & Co., the world's largest brand name apparel manufacturer, gave the world blue denim jeans. This piece of clothing greatly improved and helped the United States economy during the late 19th century to mid 20th century. Levi Strauss's jeans have been selling in more thatn 60 countries today, with 53 production facilities and 32 customer service centers in 49 countries. The company owns businesses in most European and Asian countries, in South Africa, Austraila, and South America through licensing agreements. Besides Levi Strauss & Co.'s well-known Levi's brand products, the company also markets clothing and accessories under the brand names Dockers, Britannia, and Slates.
The beginning of levi strauss & co. changing status
The denim pants, dyed with indigo to make them blue, sold
quickly, and the business of Levi Strauss & Co. expanded rapidly, moving three times to new and expanded quarters in the next 13 years.
Soon, the demand for the new pants became too great, despite the economic depression that had struck California in 1873. The success for this business also came with envious competitors; therefore, Levi Strauss & Co. filed its first lawsuit for violations against two other makers of clothing in January of 1874.
In 1877 the Levi Strauss & Co. factory expanded, and the notable features of Levi's pants--the dark blue denim, the rivets, the stitching, the guarantee of quality--became further standardized. By 1879, the pants were selling for $1.46, and they had become widely worn in the rough-and-tumble mines and ranches of the West. The company also continued to sell other dry goods, having sales of $2.4 million in 1880. Overall, the business prospered throughout the 1880s.
In 1886 the "Two Horse Brand" leather tag, showing a team of horses trying to pull apart a pair of pants, began to be sewn into the back of the company's "waist-high overalls," the term Levi Strauss preferred to "jeans." Levi Strauss & Co. was later formally incorporated and issued 18,000 shares of
stock in the company to family members and employees.
In 1912 the company introduced its first innovative product in decades, which where called Koveralls. They were designed by Simon Davis, the son of tailor Jacob Davis, who had followed his father into the business. Advertised widely, Koveralls became the first Levi Strauss & Co. product to be sold nationwide, helping the company to eventually break out of its regional market. The coming of World War I and the boom in production for the war had little impact on Levi Straus & Co., since the company held no government contracts. Its denim goods were sold only to the western laborers for whom they had originally been manufactured for. Slowly, under the hands of
the aging Stern brothers, who were resistant to change the company's policies, Levi Strauss & Co.'s enterprise was losing
In 1919 Sigmund Stern, who would take over the presidency of the company from his brother, Jacob, in 1921, brought aboard his son-in-law, Walter Haas, to give new blood to the leadership of Levi Strauss & Co.. One of the first changes he made was to update the company's inefficient system of keeping financial
records. Despite Haas's attempts at efficiency, the company was battered in the early 1920s by a steep drop in the cost of cotton, which was the primary raw material for its products. The company's profits fell by one-third in 1920. After a brief internal struggle, steps to increase overall productivity of the company were taken.
The company began attaching belt loops to its basic denim pants in 1922, in addition to the traditional suspender buttons. The firm found itself relying increasingly on the pants it manufactured, rather than the other dry goods it wholesaled, for the bulk of its profits. By 1929, 70 percent of the firm's
profit came from its sale of jeans.
The Great Depression's Impact
With the stock market crash in 1929 and the Great Depression, Levi Strauss & Co. fell on hard times. The widespread unemployment that swept the country throughout the 1930s hit the manual laborers who bought the company's pants particularly hard. By 1930, the company's profits had vanished, and it posted a loss on sales that had fallen one-sixth. Unwilling to cut back production by firing workers, the company gathered a large backlog of unsold products. The firm then put its
employees on a three-day work week. By 1932 company sales had dropped to half their level in 1929. With the coming of the next year, however, the Depression had started to lessen, and sales of Levi's pants slowly began to pick up.
By 1939 the Levi Strauss & Co. blue denim "waist overall" had just begun to be popular outside the world of blue-collar workers. College students in California and Oregon adopted them as a fad, and slowly, this humble item of clothing began to take on a status all its own. After the United States entered
World War II, the government declared the jeans an essential commodity for the war effort, available only to defense workers. This restricted distribution made them an even more demanding item, and contributed, in the long run, to the brand's success.
With the war's end, the company was prosperous. Population shifts had brought a large number of potential new customers to the West Coast, and Levi Strauss & Co. now operated five jeans factories, in an effort to keep up with demand. By 1948 company profits for the first time topped $1 million on sales of four million pairs of pants.
In the booming postwar economy of the 1950s, Levi Strauss & Co. underwent the most significant transition in the company's history. Taking advantage of popular trends, the company began to focus its marketing efforts on young people, members of the "baby boom," who would wear its pants, now known
as "Levi's," for play, not work. As a result, they shifted its emphasis of sales from rural to more urban areas. As a sign of the company's future, Levi Strauss & Co. closed down its business wholesaling others' merchandise in the early 1950s. Hollywood gave the company a large boost in its efforts to sell jeans to young people, such as celebrities and actors. Resulting in the movies the actors acted in, the pants lost their status as a symbol of the rugged frontier, and became, instead, a symbol of defiance toward the adult world.
In 1954 the company branched out from denim to the sportswear business, launching Lighter Blues, a line of casual slacks for men. The following year the company added jeans with zipper flies, as opposed to the traditional five-button
fly, in an attempt to woo customers in the East, where the pants, relegated to department store bargain basements, lagged in popularity. By the end of the decade, Levi Strauss & Co. was selling 20 million pieces of clothing a year, half of them jeans.
In the late 1950s and early 1960s, Levi Strauss & Co. experimented with different products and lines of clothing in an effort to build on its reputation and diversify its offerings. In 1959 the company introduced "Orange, Lemon and Lime," pants in six bold colors, which were a short-lived hit. The following year, white Levi's were introduced, a duplicate of traditional jeans, but made in beige twill. Also in 1960, the company introduced pre-shrunk denim jeans. In 1963 stretch denim and corduroy Levi's joined the fold.
Throughout the 1960s, the company profited from movements in U.S. society, such as campus rebellions and the counter-culture, in which jeans became a uniform. The company's growth was mind-boggling. In the mid-1960s, sales doubled in just three years to $152 million in 1966. That year, the company negotiated a $20 million loan to finance further expansion. Two years later, the company reorganized, establishing a division to produce and market women's clothing. By 1968 the company had grown to become one of the six largest clothing manufacturers in the United States, with sales nearing $200 million.
Levi Strauss & Co.'s existing, heavily centralized structure became inadequate, and operations were broken into four divisions: jeans, Levi's for women, boys' wear, and men's sportswear.
A Private Company
In 1985, as Levi Strauss & Co. continued to restructure and cut back, the company was taken private in a leveraged buy out for $1.45 billion by the Haas family, descendants of its founders and long-time company leaders. Several other
officers and directors also were members of the buy out group, Levi Strauss Associates Inc. The following year the company introduced a successful upscale men's pants line, Dockers, and, with increasing demand around the world for U.S. jeans, and with the addition of innovative finishes, such as bleaching or stone-washing, 1990 sales reached $4 billion.