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E-sales don't fit Levi's
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October 29, 1999: 6:34 p.m. ET
Jeans makers to stop direct sales to consumers on its Web sites
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NEW YORK (CNNfn) - Levi Strauss & Co., one of the first manufacturers to try selling directly to consumers on the Internet, is pulling out of its experiment as soon as this Christmas season is over.
The company had sold clothes at two sites, www.levi.com and www.dockers.com, reportedly angering some of its traditional retailers who were not able to sell the company's pants online themselves.
But the company said that retailer anger was not the reason for the retrenchment, just that it felt it could no longer make the investment necessary to succeed on the Web.
"We've learned a lot over last year. We've learned about effectively marketing our products on line," said Jeff Beckman, spokesman for the privately-held company. "We also learned that the cost of running a world-class e-commerce business is unaffordable for us right now."
The changes in its online strategy follow many stumbles by the San Francisco clothing maker in recent years. Levi's sales have been sagging as teen-agers began shunning its classic five-pocket blue jeans for trendier styles from rival designers. After a peak of $7.1 billion in 1996, sales dropped to $6.9 billion in 1997 and to $6 billion last year.
The company got a new chief executive, Philip Marineau, on Sept. 27, but Beckman said discussions about changing the e-commerce strategy at the company had started before his arrival.
Beckman would not comment on profits or losses from its e-commerce offering. Outside analysts said the timing of the decision suggested they were severe.
"Its a matter of money. Their site is very robust," said Elaine Rubin, chairman of Shop.org, the trade association for Internet retailers. "It's a fascinating announcement. Making it prior to the Christmas season leads me to believe they're probably bleeding pretty badly."
Levi's will now be sold online at jcpenney.com and macy.com, the sites of two of Levi's largest retailers. Levi's may enter into agreements with other retailers to sell online as well, Beckman said, but no announcement is imminent.
Penney will begin selling Levi's and Dockers merchandise online in time for Christmas, spokeswoman Stephanie Brown said.
"We are expecting great things, but of course, it's too early to tell," she said.
Macys.com will begin selling Levi's and Dockers products after Christmas, Beckman said.  from staff and wire reports
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