Levi Strauss & Co.’s accelerated shift into retail gear helped it boost fourth-quarter profits 28.4 percent, and the company has no plans to alter its increasingly vertical orientation.
The San Francisco-based denim giant grew its base of company-owned stores to 470 units at the end of 2010, about 190 of them in the Americas, from 414 a year earlier. Overseas, franchised units grew to about 2,000 from about 1,600 in the same period.
In the back half of 2010, Levi Strauss opened about 50 stores for Denizen, its new label based in Asia, primarily in China, India, Singapore and South Korea.
The company plans to continue its pace of retail expansion in 2011. “China — where we have over 500 franchise stores — continues to be a huge opportunity, as are India, Indonesia and Europe,” John Anderson, president and chief executive officer, told WWD.
Much of the retail sales growth in the U.S. has been concentrated in the outlet business, where comparable-store sales figures have improved, said chief financial officer Blake Jorgensen.
Bolstered by the flagship brand’s recent global vitality and improved performance from Dockers in U.S. department stores, net income reached $86.4 million for the three months ended Nov. 28, up from $67.2 million in the prior-year quarter. Total revenues grew 6.7 percent, to $1.29 billion from $1.21 billion, which included an 8.7 percent increase in licensing royalties to $28.4 million. Gross margin fell back to 50.2 percent of revenues from 51.1 percent in the 2009 quarter.
By region, sales in the Americas rose 7.2 percent to $772 million, Europe was up 4.2 percent to $300 million and Asia-Pacific revenues added 8.5 percent to reach $218 million. At constant currency rates, the Americas were up 7 percent; Europe, up 11 percent, and Asia-Pacific, up 3 percent.
For the full year, net income rose 3 percent to $156.5 million from $151.9 million. Revenues increased 7.4 percent to $4.41 billion from $4.11 billion, with licensing royalties 2.2 percent higher at $84.7 million. Gross margin advanced to 50.4 percent of revenues, up from 48.1 percent in 2009.
Retail growth was noted in all three of Levi’s sales regions. Revenues in Japan, however, continued to decline, Anderson said, as the company battled gloomy macroeconomic conditions in that market.
The launch of the Levi’s Curve ID fit system, which is based on a woman’s shape rather than size, has “exceeded our expectations,” said Anderson. That program made its debut in Levi’s stores last year and is rolling out to wholesale customers now, beginning with Macy’s and Kohl’s. Remaining wholesale customers, including J.C. Penney, will receive Curve ID product through the third quarter.
Improvements at Dockers in the department store channel have been driven by slim fits, fashion finishes and new colors, said Anderson. “We’ve brought a lot of freshness into the category. It’s a category that hasn’t seen a lot of innovation for years and there’s a whole new consumer looking for a khaki product.”
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion