Levi Strauss & Co, the oldest denim brand in the world, places India among the top of its markets globally. Having present in India since 25 years, the US-based brand has strong visibility in tier I and tier II cities in the country; it now aims to expand reach to smaller towns. In an interview with TNIE, Sanjeev Mohanty, MD (South Asia, Middle East and North Africa), Levi Strauss, discusses about the economic slowdown and its impact on retail demand, competition with fast fashion brands, sustainability and more.
Excerpts:
A lot has been spoken of economic slowdown and its impact on retail demand. Are you experiencing the same?
As a retail brand, we are impacted by the general economic slowdown. But if you look at our results, you will know our strategy is working. The year 2018 was the best year for us in over 25 years. We delivered USD 5.6 billion revenue, up 14 per cent on a reported basis (13 per cent in constant currency).
In Q3FY19, the traditional wholesale channel posted 16 per cent growth backed by the performance from Japan, India, SEA distributors and MENA. India is among our top 10 markets globally, from a volume point of view.
Fast fashion brands such as Zara and H&M have become quite popular among fashion enthusiasts. How do you plan to stay ahead?
We want to create clothing that is built to last, with style that endures. We have made it a priority to educate consumers on how they can extend the life span of their clothing — such as washing jeans less often, by getting them repaired and reinforced — and how and where they can donate and recycle anything they’re no longer wearing. Our tailor shops can help customise and repair jeans, trucker jackets and other garments to extend the life of a product, so that there’s no need to buy another pair.
Could you throw some light on the revamps and expansions of your stores across the country?
We believe we have significant opportunity to deepen our presence in key emerging markets such as India to drive long-term growth. Stores are the best expression of our brand and we are excited to open one of our biggest stores in Delhi, which is spread across 3,000 square feet at Select City Walk in Saket.
Currently, we have over 450 stores in India. Most of them are operated by our franchise partners and three stores are owned and operated by Levi’s. In January 2018, we launched a company-operated e-commerce platform in India and this is attracting a new set of customers for us in the country.
In the third quarter, our global direct-to-consumer (DTC) business was up 12 per cent. It has grown in double digits for 15 consecutive quarters. Within that, our ecommerce business grew 21 per cent, with increased traffic in the Americas, Europe and Asia.
How has the ongoing festive season been for you so far?
We cannot speculate on future performance. Diwali is one of the biggest shopping events in India and we are optimistic. That’s why we were keen to open the new store ahead of Diwali.
Sustainability, especially related to water usage in the production of denim, has become a global talking point. What is Levi’s doing in this direction?
We have set aside a 2025 Climate Action Strategy. Our sustainability targets include 90 per cent reduction of greenhouse gas emissions within our own facilities and 40 per cent reduction in our global supply chain. In addition, we will source 100 per cent of electricity from renewables, up from its current level of 20 per cent. We also aim to reduce cumulative water use for manufacturing by 50 per cent in water-stressed areas by the year 2025.