SAN FRANCISCO — Seeking to win back bargain-minded shoppers, slumping jeans maker Levi Strauss & Co. on Wednesday unveiled a discount clothing line that will be sold by Wal-Mart Stores next year.
Levi’s new Signature brand represents the San Francisco-based company’s long-awaited attempt to appeal to a fast-growing consumer segment with frugal fashion tastes.
Shoppers buy nearly one-third of their clothes at Wal-Mart, Target and other discounters, a trend that forced Levi’s to expand beyond the department store business that has generated most of its sales. Levi’s hopes to sell the Signature clothes in other discounters besides Wal-Mart.
“We want to sell our clothes in places where people want to shop,” said Phil Marineau, Levi’s chief executive officer.
Levi’s previous refusal to sell its jeans in discount chains contributed to the company’s steadily declining sales since 1996. Levi’s sales this year will total about $4 billion, down from a peak of $7.1 billion six years ago.
“If they didn’t make this move, Levi’s would be dead in three years,” said Kurt Barnard, president of Barnard’s Retail Trend Report in Upper Montclair, N.J. “This could be their salvation.”
The new Signature jeans, which will be available in Wal-Mart in July 2003, probably will sell for $23 to $26, Marineau said Wednesday.
That’s about 15 percent to 35 percent less than the typical $30 to $35 price for Levi’s most popular basic jeans.
For Bentonville, Ark.-based Wal-Mart, Levi’s Signature line will be a premium brand. Most Wal-Mart jeans sell for under $20, with some prices falling below $10, said San Francisco fashion industry consultant Harry Bernard.
Levi’s also plans to sell discount corduroy pants, shirts and jackets under the Signature brand — the company’s first new clothing line since the 1996 launch of Slates slacks. Slates has since been folded into the company’s Dockers brand.
Counting on Wal-Mart to handle all the promotion, Levi’s isn’t budgeting money to advertise the Signature brand.
While Levi’s says the new brand will be as durable as its other clothes, Signature jeans will have a bare-bones look. For instance, there won’t be any stitching on the back pocket and the label will be distinguished by a black Levi Strauss signature instead of the traditional red label.
Fashion consultant Bernard questioned whether Levi’s will be able to deliver the high volumes of low-cost clothes needed to stock Wal-Mart’s 3,000 stores. During its slump, Levi’s has been plagued by high manufacturing costs and delivery problems.
“The cards are stacked against them,” Bernard said. “They are taking their weaknesses into an arena where they need them to be strengths.”