Levi Strauss has reported that its UK sales are being impacted by consumers on the hunt for bargains as the company aims to attract “young and cool” customers.
The UK division of the renowned jeans brand, based in Northampton, noted an expansion in retail partnerships within the country, as department stores face ongoing challenges and a reduction in their market presence. These insights were shared in the latest financial statements submitted to Companies House for the year ending 30 November 2023.
During this period, Levi Strauss UK saw its turnover rise to £89 million from £77.7 million, with pre-tax profits also climbing from £4.3 million to £7.7 million. A statement from the board highlighted: “Traffic has been flattish overall or even in decline during the current year and a consistent trend of bargain hunting is directing price-sensitive customers more to outlets rather than mainline stores.” It continued: “Online customers are also more attracted by special offers and the ability to swiftly compare prices across platforms, taking a toll on conversion and return rates.”
However, the company observed a silver lining, stating: “As inventory levels are tightening up with less stock available to put on sale, we saw promotional activities drying out, with favourable impacts on gross margins and bottom line profitability.” The report also mentioned a strategic focus on female consumers: “The UK market has also seen an increased investment in female marketing activities which should lead to increased female market share.”
Levi Strauss has set out a fresh strategy, with a more dedicated focus on younger and female demographics, through tailored marketing investments. The brand intends to enhance its lifestyle image, as stated: “A more dedicated focus on the young and female consumer group with tailored marketing investments will help to achieve this goal and are expected to boost the lifestyle perception of the brand, leading to accelerated growth especially in these two areas.”
Facing the decline in department stores, Levi Strauss is also turning towards alternative retail venues. The company plans to broaden its customer base, capturing the interest of younger, trend-savvy shoppers: “As department stores continue to struggle and lose footprint in key shopping destinations, we aim to expand the customer portfolio towards online and offline retailers targeting the young and cool consumers.” Moreover, they are relying on their substantial number of owned and operated outlets across the UK to meet consumer demands: “Combined with the large footprint of owned and operated stores spread across the country, we feel well equipped to serve our target consumer in the near and long-term future.”
The company has seen a notable increase in its UK workforce during the year, rising from 1,606 employees to 1,857. In terms of financial performance, the overarching US-headquartered group announced an uptick in net revenue to $6.17 billion (£4.68 billion), a slight rise from the previous year’s $6.16 billion (£4.67 billion).
Levi Strauss’s focus on expanding retail partnerships and targeting younger and female demographics is expected to drive growth, despite the challenges posed by bargain hunters and declines in department store traffic.
