LEVI’S, AISLE THREE: Tesco PLC, the U.K.’s largest food retailer, has begun selling Levi’s 501 jeans — and Levi Strauss & Co. isn’t happy about it.
Tesco launched the jeans at its stores on Monday, March 24, and took out full-page ads in British newspapers the following Thursday proclaiming it was selling “Levi 501’s at rock bottom prices.” Tesco is retailing the jeans for $48.60 (30 pounds) a pair, compared with the average retail price in Britain of $81 (50 pounds).
Levi’s has refused to supply Tesco with its jeans. The food retailer obtained 45,000 pairs of 501s from an authorized Levi’s dealer in Mexico.
Tesco implied Levi’s was trying to restrict the market to “force customers to pay a higher price,” a charge the jeanswear company denied.
A Levi’s spokeswoman said the company insists on authorized dealers to insure they carried a full range of styles and sizes and offered quality service. She would not say whether the company will take any action against Tesco, but pointed out that Levi’s is investigating the implications of the food retailer stocking its brand.
Blacker Eases Up: Stanley Blacker has introduced a jeans style targeted to the comfort-conscious baby boomer. Called E-Z Waist, the pants come in denim, cotton twill and corduroy. Both the pants and shorts are styled to resemble five-pocket jeans, but with a discreet elastic waist. The new look, which wholesales at around $19, will launch for May deliveries at the Stanley Blacker’s women’s jeans showroom at 1410 Broadway.
PAY RAISES AT VF: A promotion along with peak sales and earnings added up to a 188 percent rise in compensation last year for Mackey J. McDonald, president and chief executive officer of VF Corp.
McDonald received $2.58 million in 1966, according to the apparel giant’s recently released proxy statement. This compares with $895,000 in 1995.
His base salary grew to $700,000 from $545,000, while his annual bonus shot up to $1.5 million from $350,000. He also received $341,250 worth of restricted stock awards.
McDonald, who had been president since 1993, assumed the post of ceo at the start of 1996. His base salary increased due to the promotion, while his bonus rose because VF achieved record sales and earnings in 1996, according to the proxy statement. As reported, net income increased 90 percent to $299.5 million, or $4.64 a share, from $157.3 million, or $2.41, in 1995. Excluding nonrecurring restructuring charges taken in 1995, earnings advanced 15 percent. Sales inched up 1.5 percent to $5.1 billion.
“Mr. McDonald is making key contributions to the corporation’s continued success in an increasingly competitive environment,” the proxy said.
Lawrence R. Pugh, the former ceo who remains chairman, made $825,800, down from $1.2 million in 1995. The proxy statement said since Pugh now acts in an advisory position to senior management, he received no incentive bonus and stock options last year. In 1995, he received a $400,000 bonus.
However, Pugh realized $3.2 million last year by exercising stock options on 140,000 shares. Pugh also received other compensation of $102,675 in 1996, including $48,482 for his personal aircraft costs and $36,500 for social club membership dues.
VF’s other top executives also took home fatter paychecks primarily due to higher bonuses.
John P. Schamberger, vice president and chairman of VF’S jeanswear coalition, earned $1.1 million against $615,333; Daniel G. MacFallan, vice president and chairman of the knitwear, playwear and intimate apparel coalitions, $1 million versus $516,250, and Gerald J. Johnson, vice president of finance and chief financial officer, $875,000 versus $466,000.
Except for Pugh, each also received stock options exercisable at $69 a share. McDonald received options for 75,000 shares; Schamberger, 22,000; MacFallan, 17,000, and Johnson, 17,000.
VF stock closed Wednesday on the New York Stock Exchange at 65 5/8, off 1.