That of course, is the desired effect. The brand, celebrating its 150th birthday, is striving to be cool again. It has already come a long way since the late-90s, when Levi's was snubbed by younger customers. Sales of the brand plummeted as Western youth turned to khakis and cargo pants, and the company was forced to take drastic action.
Under the direction of new chief executive, former Pepsi boss Phil Marineau, Levi's has reversed its sales decline by launching innovative sub-brands and retail concepts, and taking a segmented approach to customers.
The next 12 months will see a relaunch campaign for 501s, as well a focus on the women's market. It will also see the company's biggest experiment yet - Signature, a discount jeans brand to be sold through supermarkets.
But can Levi's retain its new-found cool and avoid repeating its mistakes?
And can it outride the cyclical whims of the fashion business that dictate whether denim is in one minute and seriously out the next?
Financially, Levi's still has some way to go to complete its turnaround, but its 2002 end-of-year results revealed that sales, although still flat globally, had stabilised. "The past couple of years have been about stability and starting to achieve modest growth," says Kenny Wilson, Levi Strauss European brand president. "Next year will be about building on that growth."
In Europe, Wilson says he hopes to achieve this by focusing on both the women's market and the core 501 jeans business, as well as through continued innovation and being more flexible and responsive in its speed to market.
In Levi's favour is the revival experienced by denim in the past couple of years. According to Mintel's 2003 report on the jeans market, the number of jeans sold in the UK soared by nearly 40% from 1998 to 2002. Levi's remains the leading UK jeans brand, with 15% market share - far ahead of its two biggest branded rivals, Lee and Wrangler.
The outlook isn't all rosy, though. Fashion analysts predict that after its huge growth, the women's denim market will begin to decline in the next couple of years.
Own-brand threat
James Hobbs, business group director of TNS Fashion Trak, believes that there are two major threats on the horizon. First, there is the growing dominance of own-brand jeans, particularly in the women's market. "All the growth has come from this," he warns, adding, "there is more of a tendency for girls to mix stuff up now - for example they might wear a branded top with jeans from H&M."
The other danger is the discount sector. According to Fashion Trak, supermarkets, discounters and cash-and-carry outlets now make up 27.9% of the market by volume, compared with 19.5% five years ago. Mail order and independent retailers, traditionally strong sectors for Levi's, have lost market share.
Levi's big conundrum in the past decade has been that jeans have become a universal item of clothing. While older customers might want a pair of basic blue jeans, the youth market favours a more fashion-led approach.
Wilson admits: "Our problem in the 90s was that we tried to sell the same product to everyone."
A major part of the brand's recovery strategy has been to take a segmented approach to ranges and to retailing.
Marketing director for Northern Europe Rachel Johnson says: "There is something for every age, gender, and retail group. If it's the right product, it won't cannibalise others."
Levi's believes it now has a range aimed at every customer and price.
At the top end of its 'brand pyramid' are the Red and Vintage premium ranges, which have very selective distribution. Then there are the 'evolutions' - fashion-led concepts such as Type One, Engineered Jeans and the new 100% Jeans.
The biggest segment is the mainstream Red Tab label, incorporating 501s and variations, with high-street distribution. At a lower price point is Essentials, a basic denim range aimed at an older age group and sold in stores such as Debenhams. And at the bottom of the pyramid will be Signature, sold in supermarkets.
Feminine environment
Levi's has invested heavily in targeting its own stores, in which about one-fifth of its product is sold, to different markets. As well as its mainstream Levi's Originals Stores, it boasts boutiques such as London's Cinch. Since growing the women's market is central to its plans, in September Levi's will open a girls' store in Paris.
Designed by Checkland Kindleysides and Kitchen, it will offer a more feminine environment, conceived after Levi's decided the look of its existing stores was too masculine. Aimed at an age group from 11 up through the 20s, Levi's for Girls is expected to take on brands such as Diesel, Miss Sixty and Top Shop, which have appealed successfully to younger women.
Levi's hopes to roll out the concept to other markets in the coming year.
Wilson says one result of the segmentation strategy is that the brands Levi's regards as its competition have fundamentally changed. "In the 90s I would have said Wrangler, Lee and Pepe, but you can't look at the market like that now. So George at Asda would compete with Signature and Top Shop's Moto would rival our lower-end jeans ranges, for example, while Diesel would compete at the top end," he says.
Innovations such as Type One have been core to Levi's reinvention as a more fashion-led brand. Since 1999, its above-the-line ads, through its European agency Bartle Bogle Hegarty, have focused on sub-brands to create hype around a particular line and create a 'halo' effect around the entire Levi's brand.
In the UK this began with a campaign for Sta-Prest clothing featuring the Flat Eric puppet, followed by the acclaimed 'Twisted' and 'Odyssey' campaigns for Engineered jeans. This year it launched Type 1 Jeans, backed by 'Swap', a campaign featuring human-mouse hybrids.
Continuous innovation
Derek Robson, global brand director on Levi's at BBH, says: "When it had its problems, Levi's learned that it had to build strong new concepts that could have significant volume and could also be iconic. The strategy has been to create more reasons to go back and look at the brand - having a continuous rhythm of innovation into the marketplace and ensuring those things are communicated."
But next year Levi's will shift its focus back to its core brand, the 501. Although it is still Levi's biggest sub-brand, sales of 501s have suffered long-term decline. The aim is to get a new generation interested in the jeans that became the classic look of the 80s after Nick Kamen stripped them off in 'Launderette'.
Some observers believe a focus on 501s is already overdue. Paul Poole, a former Levi's and Diesel marketer, now a consultant at PR firm Cohn & Wolfe, says: "Levi's has taken its eye off the ball a little bit there. There has been a lot of chasing fashion trends, but Levi's has to be careful not to dilute its core product too much."
Wilson puts it this way: "Our problem in the late-90s was that we had sung from the same song sheet since 1985. Now the perception of the Levi's brand as bringing out innovative products has fundamentally moved on. But at the same time our USP is that we are the original jean and we have to reassert some of those values. With the 501 project, we will bring something new out, but also talk about the enduring values of the brand."
The relaunch begins with a slightly redesigned version of the 501, which is filtering into stores now. PR work will culminate with a major above-the-line campaign from BBH in the spring.
While the creative strategy has yet to be decided, Johnson says it is likely to try to bring a new modernity to the 501 as well as emphasising its heritage. "There are two challenges: getting the loyal jeans-wearer interested again and getting the attention of the younger consumer who doesn't have any emotional connection to the 501 brand," she adds.
In line with its strategy of focusing on fashion trends, Levi's recent ads have been youth-focused, according to BBH's Robson. Will this work for the 501? "Some campaigns have been aimed at a very young audience, but 501 is a very inclusive product," claims Robson.
Even if Levi's can capture the imagination of fashion and youth on its core brand, there is still the question of price. It is addressing this with the launch of Levi's Signature. The company is at pains to emphasise that Signature is not a cut-price Levi's jean; it will be run as a separate brand, will look different - with no red tab or leather patch - and any marketing support will be retail-focused.
So what made Levi's capitulate to the supermarkets after its high-profile court battle with Tesco? The simple reason is that it cannot afford to ignore the discount consumer. According to TNS Fashion Trak, half of the market the brand traditionally operates in is now priced at less than £20.
Signature's appeal
Wilson argues that Signature will not necessarily target those who flocked to Tesco to buy cheap Levi's. "There is a group of consumers who shop in the mass channel who would not consider buying Levi's. They tend to be older consumers and less fashion-conscious, and have a ceiling on money. They have a different mentality - they take less than a minute buying jeans."
Will Signature appeal to them? Maureen Hinton, senior retail analyst at Verdict Research, is sceptical. "I don't think it is going to be a solution for Levi's unless it makes Signature a really desirable brand. Also, supermarkets are now turning away from brands to produce their own ranges."
As it fights off competition on all fronts, ensuring its brand stays youthful and fashionable is a constant challenge for Levi's. But Wilson believes that even if denim goes out of fashion again, Levi's will weather the storm.
"You can look at it negatively or positively: if the market starts to decline and other clothing brands move away from denim, the brand leader can take share. There will still be a core denim purchaser - and the Levi's brand equals jeans."
LEVI'S FINANCIAL RESULTS (USdollars, millions)
2002 2001 2000 1999
Net sales 4137 4259 4645 5139
Gross profit 1684 1798 1955 1959
Source: Levi-Strauss
UK JEANS SALES (unit sales, millions)
2003 2002 2001 2000 1999
Men's jeans 29.6 26.8 24.1 21.2 22.7
Women's jeans 32.3 31.3 20.2 13.0 16.0
Total adults' jeans 61.9 58.1 44.3 34.3 38.7
Source: TNS Fashion Trak (years ending in June)
UK JEANS MARKET
2002 2000
pounds m % share pounds m % share
Levi's 167 15 134 15
Marks & Spencer 98 9 80 9
Lee 61 5 46 5
Wrangler 56 5 49 6
Diesel 56 5 40 5
Source: Mintel
TIMELINE - LEVI'S
1853: Levi Strauss, a 24-year-old Bavarian immigrant, arrives in San Francisco.
1873: Strauss teams up with tailor Jacob Davis of Nevada to launch a blue overall using rivets to strengthen the pockets. The pair patent the process and in 1890 the product is named '501' after the lot number of the fabric.
1920: Despite a decline in the price of cotton, Levi's maintains its $25,000 ad budget - today regarded as a major building block for the brand.
1930: Levi's overalls are adopted by ranchers as leisurewear; at the same time Western movies become popular. The cowboy and the American West became the image chosen by the company to represent its brand.
1936: To differentiate Levi's overalls from competitors that had started to make denim trousers, a dark red ribbon, or tab, is stitched into its back right pocket.
1959: Levi Strauss & Co begins retailing in the UK, eventually opening an office in 1966. It soon opens a London store - in the King's Road - in 1968. A year later, Levi's changes the product name from overalls to jeans in its advertising and they begin to be worn by baby-boomers.
1985: Levi's iconic 'Launderette' TV ad featuring Nick Kamen undressing to Marvin Gaye's I Heard It Through The Grapevine boosts sales of 501s by 500%. The ad is credited with launching the classic blue jeans and white T-shirt look of the 80s.
1999: Levi's Flat Eric ads re-introduce the Sta-Prest range. Meanwhile, Phil Marineau is hired as chief executive to halt declining sales.
2000: Time magazine names Levi's the clothing brand of the 20th century. The brand introduces Engineered Jeans, advertised through the 'Twisted' campaign.
2003: Levis' celebrates its 150th anniversary, launches Type 1 jeans and announces the launch of Signature. Next year will see the relaunch of the 501 brand.
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