With Levi Strauss & Co’s last US factory closing in 2003, it practically moved its total manufacturing abroad decades ago, but recent supply chain disruptions exposing the weaknesses of far-away sourcing bases forced it to return to America.
Though it still made a short-lived limited-edition Made in America line. Levi’s was one of the last to abandon the United States; they cost uncompetitive in the late ‘80s and early ‘90s. Once leaving the US there was no chance to come back to the U.S. The sewing and everything is done very manually, and it’s low-skill, low-cost labor and that’s not the kind of labor the brand should be trying to bring onshore here in the U.S.
But now opportunities are there to bring at least 45 percent of Levi’s production closer to the US. The company does quite a bit of sourcing out of Mexico, but the denim giant is still “trying to find the right balance.”
The closer the supply chain is to the market, the more agile and responsive the company can be, and the more responsive we can be said a source in the company. Agility in the apparel business is crucial particularly when it is chasing trends and fashion.
In 2011 Levi’s sourced nearly 20 percent of its product from China. Today, that number is in the mid-single digits. Of the product arriving in the U.S., less than 1 percent comes from China. The company has derisked its source dependence on China when tariffs against China started rising. It help the company during Covid and Russia-Ukraine war as it was not over-dependence on China.
One area the company is investing in according to media reports is artificial intelligence. The company is using the technology for pricing, promotions, and product recommendations. The company was primarily a men’s blue jeans business in 2011. It was its core and profitable business and its market leader in that segment. The growth though is now slow in this segment.
In 2011 women’s clothing accounted for about 20 percent of the company’s business. Today, it is more than a third and is growing by double digits. The company also started pushing top sales as well. The planners realized that when consumers buy a jean they also need a T-shirt. Tops were introduced particularly for women that have pushed the sales in both segments (tops and bottom).
The company found that the younger generation is going for baggier jean fits right now, continuing the “new denim cycle” buoying both the men’s and women’s business.
Levi Strauss & Co from reshoring to women wear
