Levi Strauss & Co, the maker of the popular Levi’s denim jeans, has filed an application with the Department of Industrial Policy and Promotion (DIPP), the nodal agency for foreign direct investment in India, to seek approval for converting its existing local wholesale entities into direct retailing and e-commerce.
Other brands that have applied for a similar permission are Pepe Jeans, Adidas and Puma. While Pepe is looking at setting up large format, company-owned stores, Puma plans to operate its own e-commerce portal.
Although Indian regulations allowed single-brand retailers to set up their own stores, such companies had to set up wholesale subsidiaries to supply to their chain of franchisees.
That made things cumbersome as companies had to set up separate entities for retail and wholesale, with different warehousing, inventory and accounting.
The Success Story
Levi Strauss & Co is a privately held American clothing company known worldwide for its Levi’s brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Bavaria, to San Francisco, California to open a west coast branch of his brothers’ New York dry goods business. The company’s corporate headquarters is located at Levi’s Plaza in San Francisco.
From the early 1960s through the mid-1970s, Levi Strauss experienced significant 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.
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.
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.
Levis Strauss in India
Levis entered the Indian market in 1994-95, with the opening of their first store in Bangalore in June 1995. Levis holds the unique distinction of having won the prestigious Images Fashion Award for the “Most Admired Jeanswear Brand of the Year” for six years in a row.