Chip BerghWWD Apparel and Retail CEO Summit, New York, USA - 24 Oct 2017

Chip Bergh is on top — but still feeling a little antsy.

In an interview with WWD, the Levi Strauss & Co. president and chief executive officer ticked off the accomplishments for the third quarter just ended.

It was the fourth consecutive quarter of double-digit revenue growth. The women’s business increased by 26 percent, marking 13 quarters of growth. The direct-to-consumer business was up 15 percent. The long-beleaguered Dockers brand posted a 2 percent advance, the first gain in a long while as new looks were rolled out as part of a push to get the business on track.

And the company sold a T-shirt every second during the past six months — illustrating its global scope, scale and momentum.

“Fundamentally our strategies are working,” Bergh said. “The investments that we’ve made over the last couple of years, they’re returning” results. The company has been focusing on growing its profitable core, expanding beyond that and developing other categories like women’s tops and then developing the chops of a world-class click-and-brick retailer. Marketing has also been beefed up to keep the Levi’s brand front and center.

After seven years, Bergh’s turnaround of Levi’s would seem complete. The Levi’s brand feels relevant again and vibrant on a global stage, with Air Jordan and Supreme collaborations connecting with younger shoppers and pushing the company toward its first year since 1999 with sales of more than $5 billion.

But Bergh is still on the move.

Last month, he reworked the c-suite, consolidating product development and the supply chain under Liz O’Neill, while the digital and brick-and-mortar businesses were put under Marc Rosen. That gives key leaders broad control of two discreet and vital functions, with one chain of command for making and delivering goods and another for controlling the end experience and selling to consumers, whenever and wherever.

Levi’s is also looking for an executive to lead a new strategy and analytics unit that will report directly to Bergh to soup up the business with data, giving the company founded in the Gold Rush a spin that’s very much in keeping with San Francisco’s focus today.

“When you’re having a string of successes like we’ve been having now for almost two years, the biggest risk is complacency,” Bergh said. “And probably one of the best indicators of complacency is to try to protect the status quo. I wanted to use the opportunity of the momentum that we’ve had to make some structural changes.”

While some changes are catching up to the times — Bergh noted consumers “don’t roll out of bed in the morning and say today is a brick-and-mortar day or today is an e-commerce day” — the strategy and analytics piece is more forward-leaning.

“I’m making a statement here by having that role report to me,” Bergh said, noting that the company has the advantages that come with oodles of data, but can use the information better. He pointed to developments in artificial intelligence and machine learning that can supercharge the use of information locked away in its files.

Like all of fashion and retail’s legacy brands, Levi’s stands at a crossroads.

Having mastered the back-and-forth between vendors and stores and the mad-dash scramble to attract shoppers to the mall, the big players know the rules have changed and are going to keep changing. And even if the strong economy has consumers spending now and the holiday outlook is rosy, the industry is betting that the future will look drastically different, even more digital and driven by direct connections to shoppers.

Fashion knows new skills are needed — and quick.

It’s a realization that has brought a new focus and priorities far beyond Levi’s. Tapestry Inc. and Michael Kors Holdings Ltd. are chasing dreams of becoming the American version of LVMH Moët Hennessy Louis Vuitton by building portfolios. Walmart Inc. has made a remarkable digital pivot, buying, Bonobos and more. VF Corp. is splitting itself in two, moving its thriving outdoor businesses to a Denver headquarters and spinning off the more staid Lee and Wrangler businesses.

All of these changes in the marketplace — and all at once — count as a land grab for the future consumer space and open up opportunities.

Bergh said he doesn’t expect the VF jeans spin-off to spell big changes for his company. “We’ll stay on our game and continue to focus on executing or strategies,” he said.

But the ceo added that the company would be ready to “take advantage of the inevitable confusion that will happen as they do separate.”

Already, Levi’s is coming from a position of strength.

Levi’s third-quarter net income shot up 48 percent $130.1 million from $88 million a year ago as net revenues increased 9.9 percent to $1.39 billion from $1.27 billion.

Gross margins expanded to 53.2 percent of revenues, up from 51.8 percent as the company developed its direct-to-consumer business. Levi’s added 65 stores over the past year, for a total of 798, and logged 8 percent growth in wholesale sales. (The company is privately held, but has public debt and so reports on its results quarterly).

The growth has Levi’s not just charging forward, but adding to its rainy-day fund — its cash and equivalents tallied $613 million at the end of the quarter on Aug. 26. Together with the firm’s revolving credit facility, it has a total liquidity of $1.3 billion.

Levi’s has not focused on spending that money to add a brand, but the company has never counted it out.

Asked about any potential acquisitions on a conference call with analysts, Harmit Singh, executive vice president and chief financial officer, said, “There are certain categories we would take a hard look at,” but noted that any deal would have to be “the right fit culturally” and show a good return on the investment.

If that “right fit” was found and the stars aligned, even more change could come to Levi’s.

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