Levi Strauss & Co., which created a uniquely American atmosphere of youthful rebellion, may finally be coming into its own. That's the key takeaway from a recent earnings call with analysts in which incoming CEO Michelle Gass talked about Levi's goal of making Levi's “a denim apparel lifestyle his business.”
Michelle Gass was hired a year ago from the department store chain Kohl's. This month, after a year of working behind the scenes as Levi's next CEO, she will officially take the helm.
Details of Mr. Gass' early career success suggest that Levi's has found a leader who can point to a rosy future for the iconic fashion brand. Chief among Gus' accomplishments is the reputation she earned during her 16-year stint at SBUX, her alternative lifestyle brand, Starbucks.
According to a 2011 Forbes profile headlined “Starbucks' Secret Weapon,” Mr. Gass took the coffee company in a new direction in 1996, starting with “the huge success of the Frappuccino,” and led the company to $2 billion. It has been praised for growing it into a brand of scale. Starbucks was a cultural phenomenon that steadily grew throughout the 1990s. After founder and CEO Howard Schultz resigned in 2000, the company began to struggle. By 2008, the company was forced to close 600 stores, and profitability plummeted.
Mr. Schultz returned that year to save Starbucks and selected Mr. Gass, then the youngest member of the executive team, to be his chief strategist. “Michelle is a courageous leader with a rare combination of business and people skills,” Schultz told Forbes. “She was the perfect person to have by my side as I co-authored the company's transformation.”
In fact, Gus returned Starbucks to its dominance of coffee culture by restructuring the business and “reinvigorating” its 137,000 employees across 17,000 stores. Could Michelle Gass be Levi's secret weapon? There are compelling similarities.
Like Starbucks, Levi's could use a boost. The company is also transforming from primarily a wholesale supplier to department store chains to a direct-to-consumer brand with an increased number of company-operated stores and shop-in-shops. The company reported that it will operate more than 1,000 stores worldwide in 2022 and plans to add another 80 stores in 2023. Even better, the company's direct sales revenue is growing at nearly 20% annually, making it an increasing proportion of the company's profits.
Michelle Gass seems to have a good understanding of what is needed.
“Think like a retailer, keep key items in stock, increase in-store storytelling, expand assortments to increase foot traffic, increase shopping frequency, and more,” she told analysts in October. “It starts with mastering the basics of retail.”
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