The 167-year-old jeansmaker cared about running an ethical business before it became a marketing exercise. What happens to that commitment in a pandemic?
Levi Strauss & Co. reached a major milestone in 2019: after almost a decade long turnaround effort, the 167-year-old, family-controlled jeansmaker went public above the expected price, the trading floor full of analysts in denim jackets. The moment marked a resurgence Levi Strauss & Co. hadn’t seen since the 1980s. It cleaned up its business, connected with a new, young generation of shoppers and courted women back into its stores. It cut weak partnerships with department stores who sell Levi’s jeans on its behalf and opened hundreds of stores in Europe while starting to tackle China.
But all this progress could evaporate. The coronavirus pandemic forced LS&Co. to close its stores in the US, Europe and China, and online sales aren’t making up the difference. The company has had to cut salaries, furlough employees, cancel future apparel orders and borrow money to bolster its balance sheet.
LS&Co. is not alone in facing fundamental challenges. But unlike many of its peers, the company has managed to weave its business in with higher priorities: better treatment for low-wage garment workers, water conservation and energy-use reduction. The pandemic threatens LS&Co.’s abilities to pay out dividends this year, but it also pressure tests its mission-driven approach, such as efforts to source more cotton organically and invest in technologies that require less water.
But responsible business practices mean more to consumers now than ever before, giving LS&Co. even more of an incentive to stick with its climate goals. Changing consumer sentiments also put pressure on the company to accelerate its targets or risk ceding that identity to competitors. Today’s leading global brands all know the value of virtue signalling, but few take more than superficial steps to appease industry critics.