Levi’s CEO Michelle Gass: “When we think about Asia, we’re just getting started”

Having recently opened its largest flagship store in the heart of Bangkok and introduced the NextGen concept stores to its Thai customers, the American denim brand is now looking to further extend its reach in Southeast Asia with a larger store in Malaysia, and more stores opening in the region to cater to the growing younger customer base.

“We’re making such a bet on Asia due to the opportunity,” Michelle Gass, president and CEO of Levi Strauss & Co told Inside Retail in a media roundtable in Bangkok. 

“We’ve built a lot in the US, which is our biggest market, but we’re pretty well penetrated there between both our wholesale business and our growing direct-to-consumer business. We’ll still build more stores in the US, but it’s a slower-growing business. 

“When we think about our overall growth ambitions going from six to 10 billion [in revenue], Asia is an instrumental part of that equation and will be one of the highest growth areas that we invest in,” she added. “Beyond East Asia Pacific, India is another example where we expect to have tremendous growth going forward.”

The brand recently opened its largest mall store in India in Bengaluru, taking over a 6000sqft space in Nexus Mall last April. 

DTC-first strategy with an Asia focus 

“Considering the youthful population and our strong brand equity metrics across Asia, it’s a matter of how we grow thoughtfully. We see a huge pipeline of stores that we can build, as well as e-commerce opportunities,” Gass said. 

Gass, who took on the CEO role in January, said the company’s three key areas of growth for this market are new stores, same-store sales and e-commerce. Levi’s plans to significantly increase its store number globally over the next five years while growing same-store sales in its existing stores. 

Nuholt Huisamen, MD for East Asia Pacific at Levi Strauss & Co, explained that the company has taken a new approach in the region, shifting to an ‘owned and operated’ strategy, rather than working with local partners. 

“We made a conscious decision to own our brand in Southeast Asia’s markets. We rapidly expanded from not having a single store to opening our first owned and operated store on April 1. From that day until now, we’ve expanded to 153 locations in Thailand,” he said.

“We’re committed to Southeast Asia, particularly Thailand, which we view as an important market from a fashion trend perspective within the Southeast Asian context. We see places like Tokyo, Japan, and Bangkok, Thailand as fashion-forward markets within Levi’s,” Huisamen added. 

According to Huisamen, the company is 95 per cent DTC in Southeast Asia and operates almost entirely as a DTC business in Thailand, following the successful implementation of this strategy in Malaysia and Singapore.

“Every single touchpoint in Thailand is the best expression of the brand and the best expression of our store format,” Huisamen said. 

The Levi’s NextGen store at CentralWorld, which follows the Indigo style, offers a selection of products and is home to the country’s second Levi’s Tailor Shop – an alteration, restoration and customisation service. 

Maintaining brand identity while adapting to local preferences

“One of the things that the team has done exceptionally well with Levi’s over the last 10 years is positioning the brand at the centre of culture. When we talk about being brand-led, in practice, it means we have to be relevant. We have to push boundaries and ensure that all generations, especially the younger consumers, are targeted,” Gass said. 

While the brand’s collaborations with Asian celebrities and figures, such as New Jeans and Sundae Kids, have attracted young local customers, Levi’s continues to enjoy long-standing appreciation from global customers due to its 170-year legacy. The CEO indicated that Beyoncé’s recent reference to Levi’s in her latest album was entirely organic and serves as a prime example of the significance of establishing culture as the brand’s foundation.

“We’ve known Beyoncé for decades. Levi’s had a relationship with her when she was part of Destiny’s Child in the early ’90s. At that time, not many brands were partnering or supporting the band. I’ve seen the pair of Levi’s that she wore in the early ’90s, which we now have in our archives, which is incredibly cool.

“This is a relationship that has been nurtured over a long time. Now that she’s a global icon, she’s made this move. The opportunity for us to remain at the centre of culture is by seizing that opportunity.”

While the brand carries a significant history deeply ingrained in American culture, simply relying on this heritage will not be enough to captivate the Asian market. A large proportion of Asian consumers currently perceive the label as predominantly a denim brand. Their perception is narrowly focused and doesn’t extend to viewing it as a lifestyle brand. For the brand to truly resonate and gain popularity among these consumers, it needs to expand its image and offerings beyond just denim.

“We’re seeing tremendous growth in non-denim. This allows us to get into different fabrications,” Gass said, adding that the brand is also expanding its womenswear offerings. 

“We have not always had the fullest assortment to win with the female consumer. But we saw this opportunity, again, that you can do a lot more with denim than a pair of denim bottoms. We’re still going to be the denim authority in bottoms, but we should be able to do these beautiful, made-in-Japan trucker jackets, vests, or Western shirts.”

“This is not a short term [investment]. But over the long term, it’s a huge opportunity,” she added. 

Meanwhile, the brand is also bringing more product innovation, including the Performance Cool assortment, to cater to customers from tropical countries. 

“Performance Cool as a product capsule is sort of a niche product in some parts of our business. Whereas in Southeast Asia and Thailand, it’s part of our core product line. It makes up about 20 per cent of our business, which is a huge number if you think about it,” Gass revealed. 

“As this global warming reality is becoming more conscious around the globe, something like the Performance Cool assortment is going to be a far more prominent part of our assortment going forward.” 

The CEO also said the company is working on the innovation of featherweight and lightweight denim.

“The brilliance of Levi’s lies in its ability to celebrate its heritage, while also showcasing some of the most innovative products born out of consumer needs in this market, all in the same store,” Gass said. 

The executives also revealed Levi’s sister brand Dockers is looking for opportunities to grow in Asia. 

“It’s just a question of which market, the right opportunity, and the right business model. But the Dockers team, through this leadership, is busy assessing,” Huisamen disclosed. 

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