Levi’s was in trouble.
When Chip Bergh joined the iconic brand as CEO in 2011, the company was carrying $2 billion in debt while earning just $300 million a year in before-tax profits.
“Our debt ratio was 5 to 1. We were one notch above junk bond status,” Bergh said.
Pulling the teetering company back from the edge was a tough assignment, even for Bergh. He spent 28 years at Procter & Gamble, where he oversaw the firm’s acquisition of Gillette, turned around Old Spice, launched Swiffer, and grew established products such as Folgers and Jif.
But Bergh, who describes himself as “a brand guy,” had a plan. He needed to restructure the company and fix the marketing. He wanted to tap into that old feeling that once made consumers around the world covet Levi’s jeans as a symbol of American cool. When he was in middle school, that same feeling made him beg his mom to drive three towns over to buy him a pair.
“If we can make the brand cool again, put it back at the center of culture, have it resonate with young people again, that would turn the business around,” he said.
Bergh went back to marketing basics, trying to figure out what worked before the brand’s fall from fashion grace. His quest led him to the flat of a young woman in India, a well-traveled “denim head” who owned a dozen pairs of premium jeans. Bergh asked her about each pair until she came to the last two, which were Levi’s. The woman described the penultimate pair as her go-to for meeting her girlfriends for coffee or shopping at the mall. Then she got a little teary describing the last pair, which she had worn throughout college. They no longer fit, but she couldn’t bear to toss them.
“She said, ‘You wear other jeans, but you live in Levi’s,’ and I was like, ‘That’s it. That’s the idea,’” Bergh recalled. “I’ve been saying all along that everybody’s got a Levi’s story, and it’s about living your life in Levi’s. That became the selling idea behind our advertising, and 10 years later we are still using that line.”
Bergh, who retired this year from Levi Strauss & Co., spoke about his experience to Wharton marketing professors Barbara Kahn and Americus Reed during a recent episode of their “Marketing Matters” podcast, which was livestreamed on LinkedIn. (Listen to the podcast or watch the video below.)
In addition to sharing the rebranding story, Bergh also talked about taking a stand on social issues, leading through the pandemic, sustainability, succession, and the best way to wash jeans. Keep reading for highlights from the conversation.
On Purpose-driven Marketing
Levi’s has long been an LGBTQ ally and advocate. In 1992, it became the first major corporation to provide same-sex partner benefits for employees. But it didn’t step into America’s contentious gun debate until early 2016. Retail store managers in open carry states were worried about customers who came in with guns. Executives were debating a policy but decided to hold off until after the presidential election. Then it happened. A customer was changing in a dressing room when his gun accidentally discharged, the bullet piercing his foot.
“That was the straw the broke the camel’s back,” Bergh said. “We put this letter out…please don’t bring a weapon into our store.”
The backlash was expected, and Bergh received death threats. Then the Parkland High School mass shooting happened in 2018. That’s when Bergh and the board of directors decided to “go big or go home.” They established a fund to help organizations mobilized against gun violence and pushed for federal legislation.
“We’re not about repealing the Second Amendment or anything else,” Bergh said. “This is about common-sense legislation that would reduce the risk of gun violence in our country.”
On Surviving the Pandemic
Just days before the COVID-19 pandemic arrived, Levi’s was global-testing a remote work strategy. Then the lockdowns came, and it was trial by fire. As the weeks rolled on, Bergh and his team switched into survival mode. They extended health care benefits to part-time employees. But with stores closed and sales down, layoffs were inevitable.
“It was terrifying. It was the first time in my career I didn’t have a forecast. We had a high, medium, and low [scenarios]. That’s how we were running the business through the pandemic,” Bergh said.
Worried that the brand would lose all the ground it reclaimed during its revival, Bergh’s team devised a marketing idea: livestream a concert from the living room of a different artist each day at 5:01 p.m., and call it the 501 Concert Series in honor of the best-selling style.
“It was magic,” he said. “The creativity that came out during the pandemic was something that I just wanted to bottle up and say, ‘Let’s not lose this.’”
On How to Wash Jeans
True denim heads will say to never, ever wash jeans, especially in a washing machine. The washing requires a lot of water, and the agitation is too rough on the cotton fibers. Bergh said he prefers to hand wash or spot clean, but he concedes that sometimes that’s not enough.
What does he do when his jeans get too gross? Hop in the shower while wearing them.
“Soap them down, rinse them off, take them off,” he said. “If you buy really good quality denim, you don’t want to throw them in a washing machine. You’re going to destroy them much faster than they would last otherwise, and it’s better for planet Earth.”
