This story was published in the June 2018 print issue of Forbes Mexico. Subscribe.

Classic Levi's jeans cost five dollars in the hippie era (in the 1960s); By the 1980s, its price had increased fivefold, and today some models cost more than $100 in the United States, while in Mexico there are versions worth more than 2,500 pesos.

Levi's strategy of raising the price of its products when it faces more competition shows that as long as consumers approve of a product upgrade, the law of supply and demand can be challenged.

The American company stayed true to the image of its rugged jean for a century. In the 80s, it diversified models and colors and adopted a clearly urban style, but always understanding the product as a utilitarian garment and at affordable prices for the popular classes.

Now Levi's breaks with that long history and adopts a new identity: that of a manufacturer of casual clothing, but in a premium category. "We compete with other jean brands," agrees James Curleigh, Levi's executive vice president and president of global brands. “We can no longer be on the same shelves; now we are in a segment of brands associated more with life and style, sports and fashion”.

Levi Strauss came to San Francisco from Germany in the 19th century. In the middle of that century, he opened a small store where he sold clothing and household items, such as blankets, tablecloths, and sheets. Over time, work clothes topped the list of most in-demand items, and in 1873, the company was granted a patent for dyeing denim.

“Levi’s invented blue jeans; people started buying them in the United States because they associated them with the 'American' personality; they weren't just jeans; they represented something else: they were associated with miners, with hard work,” explains Roy Bagattini, executive vice president and president of Levi Strauss America.

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Madero branch, CDMX. Photo: Artuto Luna/Forbes Mexico.

For more than 30 years, the garments identified under the Levi's brand, particularly the 501 pants model, were associated with durability and strength, thus becoming favorites of the American working class of the early 20th century.

The brand has tried to keep up with the changes in casual dress that have occurred since then, and today does not have to be any different. “The millennial generation is looking for a different consumer experience and we give them a reason to choose Levi’s: What do we sell at the end of the day? Authenticity and self-expression,” says Curleigh.

American symbol

The first big change came with the advent of khakis. This innovation gave office workers, especially young people, a new alternative and led to the birth of Dockers, Levi's response to a public interested in a little more formal clothing.

The company was present in the different trends of popular behavior: denim garments for women during the beginning and the strengthening of feminist doctrines in the United States, the manufacture of sports uniforms for the participation of athletes in the Olympics and the military jackets

Levi's went from being just an icon of the working class to becoming an icon of American culture. His first garments arrived on the European Continent after World War II, but the first store outside the United States opened in Madrid... until 1983.

Selling Levi's jeans as a symbol of American culture was a formula that, at the time, was enough to break through. But the new technology lowered production costs and added new competitors to the fray.

Levi's invented blue jeans; People started buying them in the US because they associated them with the 'American' personality. They weren't just jeans: they represented something else: Roy Bagattini. Photo: Alexander Gatsenko/Getty Images.

One way to stand out from the crowd was to invest differently in marketing, becoming the main sponsor of Levi's Stadium, in Santa Clara, California, opened in 2014, home of the San Francisco 49ers. “We want to position ourselves on lifestyle and style,” says Curleigh. “I don't see other jean brands that are interested in being present in the interests of their different consumer groups.”

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Mexico in the top

The United States is still the company's largest sales pole. Last year, it billed in that country and Latin America 2,774 million dollars (mdd); in Europe, 1,312 million and, in Asia, 818 million; only that in the United States it grew just 2%. “There is a challenging environment for all sales. There have been closures of more than 300 store locations in the regions where our largest number of consumers are. This [grow a little] has been an achievement,” the company noted in its latest annual report.

The other top markets (France, Germany, Mexico and the United Kingdom) are growing at a rate of 13%. “Mexico is top on a global scale. The business has great potential,” according to Curleigh.

Levi's distributes its products in the country through more than 80 points of sale, including department stores, its own stores and American chains such as Costco and Sam's Club. In March, Levi's opened its own store on Calle de Madero, in a building in the Historic Center of Mexico City, dating from 1846, a road through which 55 million people travel each year, including tourists and the local population. .

Of the almost 3,000 Levi's stores in the world, Madero's is in the top 5, due to investment requirements. There are flagship stores in London, Paris, New York and San Francisco, each with its own peculiarities, ranging from models made in partnership with designers and sports brands, to offering vinyl records and works by urban artists.

At the Madero store, shoppers can stamp their jeans and t-shirts with a logo that was designed especially for our country, which boasts some cultural icons of Mexico City. “Today we remain a global brand because we continue to be relevant at the local level,” says Bagattini.

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Levi's already has iconic outlets around the world, such as SoHo, in New York City. Photo: Levi's.

Some jeans with technology cost more

Levi's also takes advantage of the network resources and has online sales. In the virtual store, Levi's jeans can cost between 999 and 2,500 pesos. The company says that the technological improvements for the production of the garments justify that its prices are above those of its competitors.

In 2006, it was one of the first brands to commit to reducing the environmental footprint of denim manufacturing. In 2010, it launched a collection that reduced water use by 96% and, in 2013, it unveiled its first collection made from recycled PET.

He also developed the Future-Led Execution (FLX) technology, which uses lasers to simulate the wear or fading of the denim of jeans and avoids the use of potassium permanganate, a chemical widely used in the industry, but which it is polluting and dangerous for the health of those who handle it. “We created a whole technology to digitize those processes, and yet that's not our biggest innovation,” Curleigh says.

Levi's also looks to the future. He developed a smart jacket, in conjunction with Google, that, by simply sliding your fingers along the fibers, you can read messages, play music or ask a virtual assistant for tasks. “Google and Levi's are two startups from San Francisco. One is just a few decades old, and the other is over 100 years old,” Curleigh notes. “We tried to think of something together, and that's how it was: we created the first truly wearable garment; We found a way to bring the fibers that make up the phone to the jacket.”

The smart garment is available for $350, only at the San Francisco store.

Levi's explores other similar collaborations. Far gone are the times when his jeans were the most used, but only by rude workers.

General view of Levi's Stadium, Santa Clara, California, USA. Photo: Ezra Shaw/Getty Images

Garment process

Levi's has had the ability to adapt to market requirements for more than 160 years.

1. At first, it was just a small store opened by its founder, Levi Strauss, who came to San Francisco that year and started selling clothes.
2. Levi Strauss and Jacob Davis receive the patent for the dyeing process for denim pants. The first model they produce is the Original 501, but, in those days, it is simply called “XX”.
3. For the first time, a model 501 pants are sold with the label of two horses, representative of Levi's.
4. Levi Strauss & Co. begins to sell khaki pants and jackets, which become an alternative for office workers. Levi's is no longer conceived solely as work clothes.
5. They produce their first garment for women. It is about a tunic called Freedom-Alls, which sought to coincide with the ideological liberation movement of women living on the West Coast.
6. They create Lady Levi's Jeans, the first denim pants for women.< /li>
7. With World War II, soldiers in the United States become the brand's first contact outside the country.
8. They patent the Sta-Prest process to create permanent creases in pants and shirts.
is committed to improving energy efficiency in all its processes, in favor of combating climate change.
9. With the Water collection
10. It manages to reduce greenhouse gas emissions by 13 %.
11. Waste
12. Levi's Stadium opens in San Francisco. Levi's begins to position itself as a brand of influence in sporting and social events.
13. Levi's launches the first chatbot, which, from Facebook Messenger, helps shoppers find the jeans that fit them best.
14. Smart Jacket goes on sale for $350 in partnership with Google; only available in San Francisco.