American denim giant Levi Strauss & Co is restructuring its business in India. Apart fromputting a halt to its retail expansion drive, the fully-owned Indian subsidiary of the San Francisco-based company is shutting unviable stores and has also stopped retail expansion of its low-cost denim brand Denizen.
Low consumer sentiment, slow economy and profitability issues have forced the FMCG driven Levi’s model, which tried to push multiple brands in the market, including EMI schemes for an expensive pair of jeans, to undertake a restructuring of its business. The $4.8-billion (Rs 26,548 crores) Levi’s, which was bullish about the India growth story will stay focused on its core denim appeal, it would reduce other merchandise.
While the Levi’s has declined any plans of pulling out its Denizen brand from India, it insisted that downsizing of stores in India was a part of regular business management process. The company operates more than 400 stores in India through a network of franchisee partners. Over the years, the denim maker has withdrawn several brands like Dockers, Sykes and Signature from the Indian market.
Reporting a four per cent decline in its Q2 results, Chip Bergh, President and CEO had said, “It is clear that the economic headwinds are getting stronger. While our business grew in the Americas, primarily driven by our own retail stores, Europe continues to be a challenge, and for the first time in two years our business in Asia declined. In the face of tough economic conditions, we are rationalizing our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact in growing shareholder value.”