Boss Gass from Levi's displays no inclination towards concessions.
Fresh Take:
Michelle Gass ain't backing down from her game plan. This denim queen took the reins at Levi Strauss with a mission to breathe new life into the iconic brand. Since sliding into the CEO seat in January, she's been slicing and dicing the portfolio, discarding Denizen Jeans, and phasing out the shoe market.
Gass isn't messing around. She's all about sharpening that focus on the main event – Levi's and its famous 501 jeans and trucker jackets. Other areas of the business have been holding the brand back, and now it's time to drive the attention where it matters most. Gass is also tightening the sales channels. Bye-bye to retailers who rely on heavy discounting to compete with online giants and cheap international manufacturers. Instead, expect more sales through the company's own stores.
This DTC-focused shift usually boosts a brand's profit margin. Levi's gross margin has been on the rise for four consecutive quarters, hitting 4.4% in the third. But it's a fine balance. Fashion brands that sever ties with retailers risk losing valuable shelf space, making it tough to regain ground. Nike has learned this lesson the hard way.
Gass ain't famous for impulsive decisions. Instead, she favors smart, measured moves – the kind that make a big impact without causing unnecessary risk. Remind you of anyone? Back in her days at Kohl's, she made a slew of impactful decisions, one of the most significant being the collaboration with Sephora.
In a sneaky move, she lured Sephora into Kohl's stores amidst the COVID-19 pandemic, offering access to millions of customers. Today, they're running stores in 900 Kohl's locations. Board chairman Peter Boneparth calls it "one of the most important expressions of change at Kohl's" and Gass' signature legacy.
But Gass' record is mixed. She rose through the ranks at Kohl's in no time, becoming CEO in just five years. She revamped the portfolio, expanded e-commerce capabilities, and made a deal with Amazon. But some shareholders wanted faster recovery from the pandemic. They put pressure on the company, leading to tensions.
Despite the challenges, Gass is ready for another fight. She seized the chance to join Levi Strauss, stepping up as president and spending a year familiarizing herself with the brand. She's facing a tough task, though. Analysts say she needs quick, tangible results. A marketing campaign with pop star Beyoncé might help add some shine. But will it be enough to turn Levi's around? Only time will tell.
- During her tenure, Michelle Gass has been reconsidering Levi Strauss's business approach, looking to strengthen the focus on their signature items such as Levi's jeans and trucker jackets, while potentially scaling down or exiting other sectors.
- In a strategic move that showcases Gass's knack for smart decision-making, she partnered with Sephora and brought their stores into Kohl's locations during the COVID-19 pandemic, establishing a presence in 900 stores.
- The industry leaders, particularly the CEOs of dockers-like brands, are closely watching Gass's moves at Levi Strauss and her approach to the fashion market, particularly as she faces the challenge of tangible, quick results during the ongoing pandemic.
- In order to further strengthen Levi Strauss's brand and financial position, Gass may focus on strategic partnerships and new business ventures such as expanding through boutiques or exploring potential financial collaborations with entrepreneurs in the denim industry.
