Levi Strauss & Co: India to outperform global markets in near future

Bengaluru: The global chief executive of 170-year-old jeans maker Levi Strauss & Co expects growth in India, already its sixth-largest market, to outpace other markets for the foreseeable future and form a key part of its ambition to become a $10 billion company by 2027.

San Francisco-based Levi Strauss hopes to boost its growth in India by expanding its womenswear business, opening new stores and spending more money to boost marketing spending to attract younger shoppers, according to Michelle Gass, the company’s president and chief executive.

Gass said he expects the US and European markets to grow through direct-to-consumer (D2C) business, but they will not outpace India’s growth rates.

“But if those markets can deliver consistent, modest growth, we’ll be in very good shape, and then we’ll get very strong high single-digit and, in some markets like India, double-digit growth, that’s going to be what drives our future,” Gass, who was named president and CEO earlier this year, said in an interview in Bengaluru during her second visit to India since joining the company in 2023.

Globally, Levi’s has been undergoing a restructuring as the heritage brand faces the onslaught of affordable, fast fashion and risks losing market share to the $20 jeans readily available on shein.com, particularly in markets like China and the U.S.

Plans for India

The company’s top management was in the country to meet with franchise partners and visit markets where the brand sells through 450 stores, as well as multi-brand department store chains. It also sells clothing online.

Our intention globally is to add about 100 stores per year over the next five to six years. India will have more than its fair share of those 100. I won’t give you a specific number, but it is a significant contributor.

Levi Strauss, which signed actress Deepika Padukone as its global brand ambassador in 2021, has put in place a plan to expand its offering by selling head-to-toe denim looks, selling more clothes to women, growing its retail network across the world and shoring up marketing spends to attract consumers in the 20-30 age group.

“Our intention globally is to add about 100 stores per year over the next five to six years. India will have more than its fair share of that 100. I won’t give you a specific number, but it is a significant contributor,” Gass said.

While the investments will come from the company’s 40-plus franchise partners in India, the company will spend more money on marketing its Levi’s brand. “We invested a lot in branding, in marketing, in product capabilities and in digital capabilities,” he said.

Levi Strauss has been in India for over two decades. However, as in global markets, the brand has faced intense competition from brands like H&M, Zara and Uniqlo that have entered the country in the last decade.

India’s apparel and footwear market is expected to reach $160 billion by 2030, up from $75 billion in 2022, according to a Deloitte analysis.

While it represents a huge opportunity, the market is also undergoing a shift: younger consumers are leaning toward global brands and buying more products online. Indeed, Levi’s needs to attract those shoppers and differentiate itself from the competition.

“When we think about expansion, it’s not just about building new stores… it’s also about square footage, meaning building larger stores. As we expand our assortment and get more into the women’s line, we need more space,” Gass said. Last year, the company opened its largest store in Asia in New Delhi.

Opportunity in women’s clothing

Gass has also identified women’s apparel as a big driver of the company’s growth. Levi’s, dominated by men’s jeans, gets a third of its business from women’s apparel.

Gass, dressed in a Levi’s denim skirt and a branded cotton T-shirt, said the trend could easily affect half of Levi’s business. More and more shoppers are experimenting with denim jackets, shirts, skirts and shorts as the fabric is experiencing a boom in the global fashion landscape.

“I would say that if there is one opportunity that we have not fully exploited here in India, it is the opportunity of women. As a company, women represent a third of our business and I think that is largely true in India. Women should represent half of our business; maybe even more one day… In fact, we will see India leading the world in accelerating our performance with womenswear, lifestyle products and tops,” she said.

The $10 billion ambition

In 2022, Levi’s targeted net revenue of $9 billion to $10 billion by 2027, up from $6.2 billion in net revenue in 2023.

“I am very confident that we will achieve our ambition to grow this business into a $10 billion company – we are currently at about $6 billion. The majority of our international growth will be in Asia, although we also expect continued growth in other parts of the world,” Gass said.

Levi’s products are sold in more than 100 countries. In fiscal 2023, the company earned half of its net revenue outside the U.S. It sells jeans, tops, jackets and chinos at more than 45,000 retail locations worldwide, according to the company’s annual report for the fiscal year ended Nov. 26, 2023. The company also owns the Dockers and Beyond Yoga apparel brands. However, the Levi’s brand contributes to the majority of the company’s business.

In India, in FY23, the company reported a 54.3% increase in annual revenue in ₹1,781.6 million rupees; standalone profit amounted to ₹249.3 crore rupees ₹67.7 crore in fiscal 2022, according to data from business intelligence platform Tofler. The company is yet to disclose its financial statements for fiscal 2024.