Levi to Sell Discount Brand to Wal-Mart

Levi Strauss is creating a cut-price jeans brand to be sold through the US discounter Wal-Mart. The new brand, Signature, will be Levi’s third main brand alongside Levi’s and Dockers, and will be launched in July 2003. Levi had previously refused to allow its jeans to be sold to discount retailers and supermarkets. The move reflects the increasing power of mass market price-led retailers such as Wal-Mart and the need for manufacturers to work with them. As Phil Marineau, Levi Strauss Chief Executive commented ‘You can have the best product in the world, and the best value but you need to sell where people shop.’ The price of the new brand is expected to be around £15, just above the £14 average for jeans in the US. The low price is expected to persuade shoppers, especially men, to update. The average US male owns one pair of jeans that are 10 years old and one size too small.

The development may have implications for European supermarkets such as Tesco (and Asda which is owned by Wal-Mart) who have sold cut-price Levi’s in the past.

Based on N. Buckley (2002) Levi strides into mall’s discount heart, The Financial Times, 31 October, p.23.