Other Levi Strauss Products

The original and most famous Levi Strauss product is blue jeans. Throughout its history, however, the company has researched and developed a number of other products. Some of these have succeeded beautifully, but others have flopped completely.

In 1954, flushed with the success of the cotton pants it had introduced a few years earlier, Levi brought out a line of permanent press (no-iron) trousers (slacks). Within six months, 5 out of every 100 pairs sold had been returned, and Levi had to admit it didn't have the right fabric for permanent press. Fifteen years later, as the company was planning its major expansion, it hit on a couple of equally dramatic flops. First was the denim bathing suit—which, when wet, weighed the wearer down to the point of imminent drowning. Next was a line of disposable (throw-away) sheets and towels. These, Levi discovered, were not high on the consumer's list of priorities. Unable to interest hotels in the product, the company was saved when the factory that made the sheets burned down. Levi absorbed the $250,000 loss.

Eventually Levi created six new divisions, ranging from jeans to accessories and including women's sportswear, Levi's for Girls. The diversification¹ worked. In the mid-1970s Levi's sales hit the billion-dollar mark, having taken 125 years to reach that milestone. Four years later sales hit $2-billion. In 1979 the company ranked 167 on Fortune's ²list of the 500 largest industrial corporations, and 20 in net profits.³ Between 1970 and 1980 Levi had grown an average of 23 percent a year. In 1979 alone it sold 143 million garments.

In menswear, though, all Levi products had been aimed at the middle of the market. The company had brought out a line of moderately dressy slacks and polyester leisure suits—the Action Slack and Action Suit—and was doing a brisk business with them. But the tempting upper end of the market remained untouched.

“If we want to grow we're probably going to have to go to upper moderate price points,” one Levi official explained, “and somewhat higher taste levels for our products.” In short, they needed to sell more expensive clothes like the Tailored Classic. If Levi could sell sport coats, dress slacks, and suits, a whole new market would open up. The Tailored Classic might make money all by itself. But even more important, it would get Levi into the business of producing fancier and costlier clothing. The consumer would come to think of it as a manufacturer of dress and it could spin off⁴ many more such lines in the future.

Notes:

1. production of very different kinds of products;

2. an important U.S. business magazine;

3. profits after the company pays income taxes;

4. create (other related products).

Text C