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Levi’s Leans on D2C Growth

Digital Success for Denim Giant

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Levi Strauss & Co. has seen a significant uplift in D2C business, achieving a 10% rise in the U.S. and a 13% increase in eCommerce revenue across the business during the first quarter of fiscal 2024.

Despite a year-over-year net revenue decline of 8%, the D2C channels remarkably contributed a record 48% to the total net revenues.

This performance underscores the apparel giant's successful efforts in refining its digital shopping experience, with CEO Michelle Gass highlighting eight consecutive quarters of robust comp growth in the global D2C business.

The push towards enhancing online shopping experiences, including improved site search, navigation, and product presentation, is part of Levi’s strategy to cater to the digital-first preferences of consumers, especially the younger generations. PYMNTS Intelligence report, in collaboration with Adobe, supports this direction, revealing that Generation Z shoppers show a strong preference for buying directly from brands.

Levi’s efforts in the D2C arena are not just about selling; they're about creating engaging, intuitive experiences that foster brand loyalty and gather insightful customer data. These direct interactions allow for more personalized and effective marketing strategies, ultimately driving higher product margins by eliminating intermediaries.

Adding to the optimism around Levi’s brand and its strategic direction is the unexpected shoutout from Beyoncé in her song "Levii’s Jeans" from her album, "Cowboy Carter". This cultural nod has not only elevated the brand's cool factor but also reinforced its position at the center of cultural trends.

The Levi’s name was also ranked as the most-trusted brand in the textiles, clothing and luxury goods category of Newsweek’s Most Trustworthy Companies report.

Despite facing challenges in the broader market, evidenced by a net loss of $10.6 million in Q1 and a decline in wholesale revenue, Levi's managed to expand its gross margin and reduce inventory levels. The company's focus on expense management and inventory discipline, alongside its growing D2C and eCommerce strength, has provided a buffer against the downturns.

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