Levi Strauss and Co. is trying on brand collaborations to grow its business.

The San Francisco jeans maker put together a new collaborations team about a year ago, mixing company veterans on the creative side with new merchandising and marketing hires. The result is a spate of partnerships with other iconic brands like Filson and more edgy designers like Opening Ceremony and Billy Reid. Several others will be announced before the end of the year, including one with Stussy. Still more partnerships will come in 2011 and 2012.
Levi has long done limited partnerships, but never this many all at once or with the bottom line goal of growing the business.“Over the last couple of years we have gotten more strategic about how we partner with brands, individuals and institutions, and integrated it more into our core business,” said Joshua Katz, the senior brand manager who heads Levi’s collaborations. “The value of these projects comes in connecting to a certain community, being able to tell a new and fresh story, and also how these collaborations allow us to create better product and better communicate the brand.”

That reflects a big-picture shift in the company as it fights to regain primacy in the denim world.
“If you are Levi, you are sitting there looking at your situation, and what you are looking at is a loss of market share. … They did $7.1 billion in sales and now they do $3.8 billion,” said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm. “The people they are losing to are people doing private label and developing their own products. Walk through a mall, and who’s got Levi? Nobody.”

Levi once sold to specialty retailers like Gap, which now makes its own jeans. Some key wholesale accounts like Mervyns have gone the way of the dodo, and Levi more or less missed the explosion of premium denim in the first decade of this century during which Seven for All Mankind and its ilk dominated the denim fashion world.

While the business is more efficient than it has been for years, Levi must rebuild its consumer base and sales, Davidowitz said. In that light, these collaborations are smart. Levi has been missing on the merchandise and on the pizzazz side, he said, and these could bring back some of those.

Early signs are that it’s working.

The Levi trucker jacket in Filson’s oil tin cloth sold out in days and had to be re-ordered. They were available only in Filson and Levi stores and at Levi.com, so the partnership gave existing and new customers a reason to go into a Levi’s store. These collaborations may be some customers’ only entry point to the Levi brand. The Filson, Opening Ceremony and Billy Reid collections are all made entirely in the United States and are jointly designed. They retail for more than a traditional pair of red tab Levi’s, but below Levi’s XX premium lines. Katz said these collaborations are profitable while feeding a broader commercial strategy.

“Our objective is to create new and compelling products that certainly push the envelope of what Levi does, but also something that existing customers can use and get them excited about the brand,” Katz said. “That leads to commercial success for us.”