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Levi Straus Changes Online Strategy

October 29, 1999

SAN FRANCISCO (AP) _ Levi Strauss & Co. will stop selling merchandise on its Levi’s and Dockers Web sites after Christmas, the latest trouble facing the struggling jeans maker.

Levi’s clothing and accessories _ such as jeans, khakis, hats and belts _ will instead be sold on Web sites operated by J.C. Penney and Macy’s, two of Levi’s biggest customers.

The San Francisco Chronicle, citing sources it did not identify, said sales at www.levi.com and www.dockers.com have not met expectations and costs have been very high.

Levi’s spokesman Jeff Beckman denied the company was unhappy with its online sales.

However, he added, ``during the past year, it became clear to us that the cost of running a truly world-class e-commerce business is unaffordable right now as we look at other competing priorities.″

The changes in its online strategy follow many stumbles by the giant jeans maker in recent years.

Levi’s sales have been sagging as teen-agers began shunning its classic five-pocket blue jeans for trendier styles by rival designers. After a peak of $7.1 billion in 1996, sales dropped to $6.9 billion in 1997 and to $6 billion last year.

A year ago, Levi’s launched its online stores, saying they were an easy way to learn more about its consumers and keep in touch with their ever-changing desires. But the move angered the company’s key retail partners, who were forbidden from selling Levi’s and Dockers over the Web.

The two sites will remain up, offering information such as store locators. The company may expand its e-commerce partners in the future, Beckman said.

Penney will begin selling Levi’s and Dockers merchandise at www.jcpenney.com in time for Christmas, said spokeswoman Stephanie Brown.

``We are expecting great things, but of course, it’s too early to tell,″ she said.

Macys.com will begin selling Levi’s and Dockers products after Christmas, Beckman said.

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