The mass-priced Levi Strauss Signature line filed into Target Stores’ 1,227 units Wednesday, marking the brand’s second full rollout across a major U.S. discounter.
This story first appeared in the January 15, 2004 issue of WWD. Subscribe Today.
In a move that appears to reflect Minneapolis-based Target’s strong focus on advertising, the marketing gloves are coming off.
“We are looking at a whole range of marketing tactics,” a Levi’s spokesman said. Asked whether that could include TV and national prints ads, he said the company was “not ruling it out.”
The Signature brand has not been advertised outside of Wal-Mart stores since launching there in June.
When Levi’s in October 2002 revealed its plans to introduce the Signature brand at Wal-Mart, chief customer officer Gregg Hammann said, “It will not be an advertised brand. It will be presented at point of sale within the mass channel.”
The decision not to advertise the brand was seen by sources as a move to placate the national chains and department stores that are the key outlets for Levi’s primary Red Tab line. Signature jeans retail for $20 to $25, about $10 below the opening price point for Red Tab, but Levi’s executives have said their research has shown no evidence of the launch at Wal-Mart cannibalizing sales of the brand elsewhere.
However, Levi’s has also warned that sales for the year ended November were off by 6 to 7 percent, factoring out the effect of exchange-rate fluctuations. That means any new revenues brought in by the Signature business were more than offset by sales declines elsewhere in the Levi Strauss & Co. franchise. Executives at the San Francisco-based company acknowledged that retailers have held back on orders out of concern their Levi’s sales would be hurt because of the brand’s appearance in Wal-Mart.
The Levi spokesman asserted the decision to consider advertising Signature was not a policy shift.
“We approached the Wal-Mart business using the idea that we were responsible for marketing our own product,” he said.
Target’s recent TV campaigns have highlighted the national brands available in the store.
“Target’s partnership with Levi Strauss Signature demonstrates our ongoing commitment to delivering trend-forward fashion, as well as great value,” Target senior vice president of marketing Trish Adams said in a statement. She expressed enthusiasm about “the opportunity to introduce this brand to our guests.”
WWD first reported that Levi’s had started shipping test batches of Signature product to Target stores last month.
In a research report, Banc of America Securities analysts Ronald W. Phillis and Kathleen Brady wrote of the strong likelihood Target would want to advertise the Levi’s brand “given the company’s marketing and advertising focus.”
“We believe that Levi will need to take additional steps in order to maintain good relationships with its department-store retailers,” they wrote.
In a separate development, a spokeswoman said Levi’s will not run any ads during next month’s Super Bowl. The company had bought time at the event for the past three years, but last year’s ad — featuring a stampede of cattle — left president and chief executive officer Phil Marineau unimpressed.