Levi’s bet on brick-and-mortar and personalized denim is driving a sales boom — putting the brand in retail’s sweet spot
Bringing the ’90s back… in those high-school low-rises. Levi’s scored big last quarter as you splurged on jumpers and jean jackets for IRL date nights. Its CEO said that despite hiking prices, customers still shelled out more $$ for their jeans and cotton tees — and expects strong sales to continue. Total sales jumped 22% even after the denim icon took a $60M hit to combat supply snafus. Digi-sales jumped 16%, making up a quarter of Levi’s revenue. Still, Levi’s shares are down 20%+ over the past year.
501-fitting appointment… Retailers lost billions during the pandemic as we swapped distressed denim for old college sweats. Since Levi’s couldn’t control its wholesaler’s closures (like: Kohl’s and Nordstrom), it focused on selling directly through its own channels, both online and in stores. As part of that strategy, Levi’s built its first handful of upgraded locations it’s dubbed “NextGen,” and it plans to roll out 30 more this year:
- Tailor shop: Customers pick from a brunch-style menu of services like: custom embroidery, alterations, even converting old jeans into Coachella-worthy jorts.
- Endless AI-sles: Levi’s uses artificial intelligence to predict what style and price will sell best in each location (think: shorts in Silver Lake, trucker jackets in Brooklyn).
- Payoff: Sales at company-operated Levi’s stores jumped 48% last quarter, while D2C sales made up 39% of total sales.
Levi's is in retail’s sweet spot… Its customers are paying higher prices and buying directly. That sweetens profits, since there’s no one in the middle to take a cut. But to justify higher prices and boost direct sales, retailers need to premium-ify the shopping experience (or at least give it some pizazz). Instead of buying $30 Levi’s from Ross, you might choose the Levi’s store to get a flower patch sewn into your jean jacket.