India to outperform global markets for the foreseeable future: Levi Strauss & Co

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

According to Michelle Gass, the company's president and chief executive officer, the San Francisco-headquartered Levi Strauss expects to drive its India growth by expanding women’s wear, opening new stores, and spending more money to boost marketing spends and draw younger shoppers to its fold.

Gass said she expects the US and European markets to grow through the direct-to-consumer (D2C) business, but they won't beat the growth rates of India.

“But if those markets can provide steady, modest growth, we're in great shape, and then we get the very strong high single digits and, in some markets like India, double-digit growth, that's going to be what fuels our future," Gass, who was named president and CEO earlier this year, said in an interview in Bengaluru while on her second visit to India since joining the company in 2023.

Globally, Levi’s has been undergoing a recast as the legacy brand deals with the onslaught of affordable fast fashion and risks losing market share to $20 jeans easily available on shein.com, particularly in markets like China and the US.

Plans for India

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

Levi Strauss, which roped in actor Deepika Padukone as its global brand ambassador in 2021, has put in place a plan to expand its offerings selling denim looks from head-to-toe, selling more clothing to women, growing its retail network around the world, as well as shoring up marketing spends to appeal to consumers within the age group of 20-30 years.

“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's a significant contributor," Gass said.

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While investments will come from the company's 40-plus franchise partners in India, it will spend more money on marketing its Levi's brand. “We invest a lot in the brand, marketing, we invest in product capabilities, we invest in digital capabilities," she said.

Levi Strauss has been in India for more than two decades. However, much like markets globally, the brand has faced intense competition from the likes of H&M, Zara and Uniqlo that have entered the country over the past decade or so.

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

While it presents a large opportunity, the market is also seeing a shift with young consumers pivoting to global brands and buying more goods online. In effect, Levi’s needs to appeal to those shoppers and differentiate from competition.

"As we think about expansion, it's not only about building new stores… but it's also square footage, that is, building bigger stores. As we expand our assortment and get more into women's, we need more space," Gass said. Last year, the company opened its largest store in Asia in New Delhi.

Women's clothing opportunity

Gass has also identified women’s clothing as a big driver for the company’s growth. Dominated by men’s denims, Levi’s draws a third of its business from women's clothing.

Gass, dressed in Levi’s denim skirt and a cotton top from the brand, said this could easily touch a half of the Levi’s business eventually. More shoppers are experimenting with denim jackets, shirts, skirts and shorts, with the fabric seeing a surge in the global fashion landscape.

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“I would say if there's an opportunity that we have not realized the full potential of here in India, it’s women’s. As a company, women are a third of our business and I think that's largely true in India. Women should be half our business; maybe even more someday…We're actually going to see India leading the world on accelerating our performance with women’ wear, lifestyle products and tops," she said.

The $10-billion ambition

In 2022, Levi's set an ambition to reach $9-10 billion in net revenue by 2027, up from 2023's net revenues of $6.2 billion.

“I feel extremely confident that we will reach our aspiration to grow this company to a $10-billion enterprise; we're about $6 billion right now. Most of our international growth is going to come out of Asia, while we still expect steady growth in other parts of the world as well," Gass said.

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Levi’s products are sold in over 100 countries. In fiscal 2023, the company derived half its net revenues from outside the US. It sells jeans, tops, jackets and chinos in over 45,000 retail locations globally, per the company’s annual report for the fiscal year ended 26 November 2023. The company also owns Dockers and Beyond Yoga clothing brands. However, brand Levi’s contributes to the bulk of the company’s business.

In India, in FY23, the company reported a 54.3% jump in yearly income at ₹1,781.6 crore; standalone profit was up to ₹249.3 crore from ₹67.7 crore in FY22, according to data sourced from business intelligence platform Tofler. The company has not disclosed FY24 financials yet.