By  on February 7, 2018

Levi Strauss & Co.’s namesake — a quintessentially American brand facing a befuddled market at home — has grown well beyond its own borders and found the international scene welcoming and profitable.“This is a different company today than it was five or six years ago,” Chip Bergh, president and chief executive officer, told WWD, touting strong sales gains in 2017, with some extra momentum in the fiscal fourth quarter. “This is the first year where the United States is less than half of our business, the international business has been growing at a faster rate. [Direct-to-consumer] is now more than 30 percent of the business. All of these businesses are higher gross margin businesses for us, so we feel really good about our strategies, they’re clearly working.”Levi Strauss’ fourth-quarter net profits increased 20.8 percent to $116 million for the period ended Nov. 26 as revenues grew 12.9 percent to $1.47 billion. (The strength generally continued into the holiday season, when most retailers saw their businesses pick up).https://www.youtube.com/watch?v=B8Os0_9ON9oFor the full year, net profits took a $23 million hit from the early extinguishment of debt and slipped 3.3 percent to $281.4 million as revenues gained 7.7 percent to $4.9 billion. (Sales in the Americas rose 3.4 percent to $2.77 billion, while Europe gained 20.3 percent to $1.3 billion and Asia increased 5.1 percent to $818 million).The overall result showed a significant increase in sales momentum — sales in 2016 rose just 1.3 percent — as Bergh’s efforts to diversify the company’s base clicked into place.Now the trick is to keep it growing.“We’re investing for the future, we doubled down in advertising in the second half of last year,” Bergh said. “We’re going to guide it to a higher level of advertising investment for the full year this year.”That includes TV and digital marketing support for the business.And Levi’s has also been collaborating with Supreme, Off-White, Vetements and, most recently, Air Jordan. “These things, they create a shortage mentality,” the ceo said. “They’re a must-have item. It creates a lot of buzz for the brand.”While Bergh called 2017 an “inflection point,” he also acknowledged the work to be done to turn around the Dockers brand and to better connect with customers via wholesale partners.“The U.S. wholesale channel, which is still almost a third of our business, is still pretty challenged,” he said. “We’re going to continue to see disruption to the U.S. wholesale landscape.”He noted that Sears Holdings Corp. has laid out plans to close another 100 stores and that Bon-Ton Stores Inc. succumbed to bankruptcy and said it would shutter 42.“We’re already looking at about 150 doors and it’s just early February,” Bergh said. “Last year, in our customer base, we lost about 300 doors [among the company’s wholesale partners], so I think we’re going to be on a path to see another 200 to 300 doors close this year. We haven’t hit the bottom from the store count standpoint.”And a certain unease has set in, with a massive drop on Wall Street this week reminding everyone that bull markets don’t last forever.Harmit Singh, executive vice president and chief financial officer, said the diversity of the company’s businesses would help it weather changes in the landscape.“Markets are probably going to be choppy during the year,” Singh said. “The thing for us to think through is, how do we continue executing our strategy?”

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