Strengthening DTC, Diversifying Supply Chains…Best Performance Since 1997
Image changes and retro trends intertwine… Targeting Generation Z is a success.
Levi’s bankruptcy
Levi’s’s spectacular comeback is garnering attention from the global fashion industry. Once a driving force behind the jeans craze, Levi’s had faded into obscurity amidst the athleisure and skinny jeans trends. However, the resurgence of Y2K vibes and retro styles is fueling a new heyday. The lifestyles of Generation Z and millennials, in particular, are driving the brand’s revival.
This transformation is evident in its performance. Since 2025, Levi Strauss’ stock price has risen by over 20%, a remarkable achievement in a global consumer market shrinking due to high prices. Levi’s, which dominated the global jeans market in the mid-1990s with annual sales of $7 billion, subsequently experienced a prolonged slump. However, it has recently been laying the foundation for sustainable growth through a multi-layered strategy that includes product portfolio restructuring, strengthening its direct-to-consumer (DTC) channel, and brand repositioning.
# Levi’s’ revival factor: ‘Strategic constitution improvement’
Levi Strauss is laying the foundation for sustainable growth based on a multi-layered strategy that includes product portfolio restructuring, strengthening DTC channels, and brand repositioning. [Photo = Levi Strauss & Co.]
First, Levi Strauss has boldly reduced its unprofitable business units and is restructuring itself. In May, it announced that it would sell Dockers, a key Levi Strauss brand, to Authentic Brands Group for $311 million (approximately 430.6 billion won). Furthermore, the company has removed Denizen, a low-priced denim brand with low distribution margins and fierce price competition, from its strategic priorities, focusing its resources on its core businesses.
During this process, Levi’s underwent a comprehensive review of its global store portfolio and shifted to a profitability-based store operation strategy. In particular, the company focused on boldly closing inefficient stores and transitioning to a direct-to-consumer (DTC) model. DTC refers to a business model in which manufacturers or brands sell products directly to consumers, bypassing intermediaries.
The DTC-centric distribution strategy has proven particularly effective in the European market. Operating approximately 700 offline stores in Europe, the brand has prioritized DTC channels and leveraged a connected omnichannel network to create a structure that allows customers to shop wherever they are. This strategy has led to a 9% growth rate for the DTC category in the European market.
Levi’s has implemented a strategy of directly collecting and analyzing consumer data, providing personalized customer experiences and increasing brand loyalty. By directly communicating with customers through its own online store and flagship stores, Levi’s has strengthened brand consistency and focused on customer experience-centric channel operations.
# Brand repositioning targeting the younger generation
A distinct shift in brand image has also occurred. Levi’s has redefined its identity from a “jeans manufacturer” to a “denim-based lifestyle brand.” Targeting Generation Z and Millennials, who prioritize sensibility and taste, the company has shifted its strategy to resonate not only with its products but also with the brand’s attitude and philosophy.
A look at the Levi Strauss and Beyoncé collaboration, featuring denim outerwear and pants inspired by Y2K. [Photo = Levi Strauss & Co.]
These changes are being realized through various cultural collaborations and marketing.
This year in particular, we presented the second chapter of the REIIMAGINE campaign, Pool Hall, in collaboration with global icon Beyoncé, and successfully completed collaborations with global brands such as Sacai and Nike.
Additionally, we are strengthening emotional connections with consumers through participatory content and community-centered campaigns based on social media.
On social media platforms like Instagram and TikTok, retro hashtags like “#Y2Kfashion,” “#lowrisejeans,” and “#denimstyle” have each garnered over 1 billion views, demonstrating Gen Z’s growing interest. On TikTok, loose-fit denim fashion challenges, centered around “#Levis501,” are gaining popularity.
This phenomenon is also intertwined with overall market changes. A growing fatigue with the athleisure trend and the resurgence of 1990s and Y2K (early 2000s) styles are fueling a rebound in denim demand. With loose fits and retro silhouettes gaining popularity, Levi’s is naturally gaining recognition as a traditional denim brand.
Consumer reaction also supports this trend. “I recently started wearing a pair of Levi’s jeans that I inherited from my mom, and they’ve been so well-received that my friends are asking if they’re new,” said Kim, a 22-year-old college student living in Seoul. “These days, I’m more drawn to sentimental and unique items.”
These internal and external factors have translated into positive performance. Levi Strauss & Co. achieved its best performance since 1997, posting net sales of $6.4 billion in fiscal 2024. Net sales for the second quarter also showed solid performance, reaching $1.4 billion. Levi Strauss & Co.’s gross profit margin for the most recent quarter was approximately 62.6%, exceeding the industry average. This figure surpasses major competitors such as Gap (approximately 38%) and H&M (approximately 50%), and is similar to the average (64-66%) for Inditex, Zara’s parent company.
Expanding women’s products, collaborating, and pursuing a ‘parallel strategy’ for sustainable growth.
Levi’s x Nike Collaborative Collection Commemorates the 30th Anniversary of the Air Max 95
However, despite Levi’s impressive performance, challenges remain. While the DTC model offers the advantage of reducing distribution margins and expanding customer touchpoints, it also carries the downside of increased logistics and operating costs. Indeed, Levi’s’ operating profit margin currently stands at around 7.5%, half that of Inditex, prompting calls for further efforts to improve profitability.
Levi’s is pursuing a multifaceted strategy to offset these risks and maintain strong, sustainable growth.
The most notable key strategy is expanding the female consumer base. To overcome the brand’s past image as a male-centric denim brand, the brand is actively expanding its product line beyond women’s-only lines, including jumpsuits, denim dresses, and skirts. In fact, in the European market, female customers reportedly account for nearly 45% of total sales, demonstrating the significant success of this strategy.
In addition, data-driven product planning is gaining momentum. Levi’s collaborated with Google Cloud to develop a system that analyzes customer fit preferences, sizes, and color trends, and then proactively plans popular products like loose fits, baggy fits, and high-rise styles. This predictive production strategy significantly reduces inventory loss and increases product turnover.
Levi’s is also seeking to diversify its supply chain strategy. While reducing its dependence on China, it is gradually expanding its production bases to Asian countries like Bangladesh, Indonesia, and Cambodia. This is a proactive measure to address tariff risks and geopolitical supply chain instability.
Industry insiders say, “Levi’s is a rare example of a brand that has innovated both its strategy and its structure over a long period of time, rather than just following trends,” and “It is a textbook example of how a traditional brand can once again be chosen by the younger generation.”
Shin A-rang, editor [email protected]