Organization
Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific Division (APD), based in Singapore. The company employs a staff of approximately 10,500 people worldwide, and owns and develops a few brands. Levi's, the main brand, was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion.
From the early 1960s through the mid 1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 1960s and 1970s ushered in the "blue jeans craze" and served as a catalyst for the brand. Levi's, under the leadership of Jay Walter Haas Sr., Peter Haas Sr., Paul Glasco and George P. Simpkins Sr., expanded the firm's clothing line by adding new fashions and models, including stoned washed jeans through the acquisition of Great Western Garment Co. (GWG), a Canadian clothing manufacturer, acquired by Levi's. GWG was responsible for the introduction of the modern "stone washing" technique, still in use by Levi Strauss.
Mr. Simpkins is credited with the company's record paced expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants nationwide from 1964 through 1974. Perhaps most impressive, however, was that Levi's expansion under Simpkins was accomplished without a single unionized employee as a result of Levi's' and the Hass families' strong stance on human rights and Simpkins' use of "pay for performance" manufacturing at the sewing machine operator level up. As a result, Levi's' plants were perhaps the highest performing, best organized and cleanest textile facilities of their time. Levi's even piped in massive amounts of air conditioning into its press plants, which were known in the industry to be notoriously hot, for the comfort of Levi's workers.
2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down. Dockers was launched in 1986. Sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Levi Strauss attempted to sell the brand in 2004 to relieve part of the company's $2 billion outstanding debt.
Launched in 2003, Levi Strauss Signature features jeanswear and casualwear. In November 2007, Levi's released a mobile phone in co-operation with ModeLabs. Many of the phone's cosmetic attributes are customisable at the point of purchase.
History
Jacob Davis was a tailor who frequently purchased bolts of cloth made from hemp from Levi Strauss & Co.'s wholesale house. After one of Davis' customers kept purchasing cloth to reinforce torn pants, he had an idea to use copper rivets to reinforce the points of strain, such as on the pocket corners and at the base of the button fly. Davis did not have the required money to purchase a patent, so he wrote to Strauss suggesting that they go into business together. After Levi accepted Jacob's offer, on May 20, 1873, the two men received patent #139,121 from the United States Patent and Trademark Office. The patented rivet was later incorporated into the company's jean design and advertisements. Contrary to an advertising campaign suggesting that Levi Strauss sold his first jeans to gold miners during the California Gold Rush (which peaked in 1849), the manufacturing of denim overalls only began in the 1870s.
Modern jeans began to appear in the 1920s, but sales were largely confined to the working people of the western United States, such as cowboys, lumberjacks, and railroad workers. Levi's jeans apparently were first introduced to the East during the dude ranch craze of the 1930's, when vacationing Easterners returned home with tales (and usually examples) of the hard-wearing pants with rivets. Another boost came in World War II, when blue jeans were declared an essential commodity and were sold only to people engaged in defense work. From a company with fifteen salespeople, two plants, and almost no business east of the Mississippi in 1946, the organization grew in thirty years to include a sales force of more than 22,000, with 50 plants and offices in 35 countries.
In the 1950s and 1960s, Levi's jeans became popular among a wide range of youth subcultures, including greasers, mods, rockers, hippies and skinheads . Levi's popular shrink-to-fit 501s were sold in a unique sizing arrangement; the indicated size was related to the size of the jeans prior to shrinking, and the shrinkage was substantial. The company still produces these unshrunk, uniquely sized jeans, and they still sell very well. Although popular lore (abetted by company marketing) holds that the original design remains unaltered, this is not the case: the company's president got too close to a campfire, and the rivet at the bottom of the crotch conducted the fire's heat too well; the offending rivet, which is depicted in old advertisements, was removed.
1990s and later
By the 1990s, the brand was facing competition from other brands and cheaper products from overseas, and began accelerating the pace of its US factory closures and its use of offshore subcontracting agreements. In 1991, Levi Strauss faced a scandal involving six subsidiary factories on the Northern Mariana Islands, a US commonwealth, where some 3% of Levi's jeans sold annually with the Made in the USA label were shown to have been made by Chinese laborers under what the United States Department of Labor called "slavelike" conditions.
Cited for sub-minimum wages, seven-day work weeks with 12-hour shifts, poor living conditions and other indignities, Tan Holdings Corporation, Levi Strauss' Marianas subcontractor, paid what were then the largest fines in US labor history, distributing more than $9 million in restitution to some 1,200 employees. Levi Strauss claimed no knowledge of the offenses, then severed ties to the Tan family and instituted labor reforms and inspection practices in its offshore facilities.
The activist group Fuerza Unida (United Force) was formed following the January 1990 closure of a plant in San Antonio, Texas, in which 1,150 seamstresses (primarily Latinas) — some of whom had worked for Levi Strauss for decades — saw their jobs exported to Costa Rica. During the mid and late 1990s, Fuerza Unida picketed the Levi Strauss headquarters in San Francisco and staged hunger strikes and sit-ins in protest of the company's labor policies.
The company took on multi-billion dollar debt in February 1996 to help finance a series of leveraged stock buyouts among family members. Shares in Levi Strauss stock are not publicly traded; the firm is today owned almost entirely by indirect descendants and relatives of Levi Strauss, whose four nephews inherited the San Francisco dry goods firm after their uncle's death in 1902. The corporation's bonds are traded publicly, as are shares of the company's Japanese affiliate, Levi Strauss Japan K.K.
In June 1996, the company offered to pay its workers an unusual dividend of up to $750 million in six years' time, having halted an employee stock plan at the time of the internal family buyout. However, the company failed to make cash flow targets, and no worker dividends were paid. In 2002, Levi Strauss began a close business collaboration with Wal-Mart, producing a special line of "Signature" jeans and other clothes for exclusive sale in Wal-Mart stores until 2006. Levi Strauss Signature jeans can now be purchased at several stores in the US, Canada, India and Japan.
According to the New York Times, Levi Strauss leads the apparel industry in trademark infringement cases, filing nearly 100 lawsuits against competitors since 2001. Most cases center on the alleged imitation of Levi's back pocket double arc stitching pattern (U.S. trademark #1,139,254). Levi's has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans , among other companies.
By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years. Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s. After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007.
