CTSM Portfolio / Michael Mecham Page 1

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COMPANY BACKGROUND After 150+ years in the industry, Levi Strauss & Co. (LS&Co.) has rightfully earned a place in history as the inventor of original and authentic blue jeans. Today, LS&Co. owns the Levi’s®, Dockers®, and Levi Strauss Signature® Brands, and their sub brand properties, and operates in 110 countries all over the world making it the largest global apparel market share holder. The company is privately held and managed with nearly $4.2 Billion in annual net sales for the total company. Levis® Jeans are the most successful, widely recognized and most often imitated clothing product in the history of apparel. The Levi's® brand continues to define Jeanswear with widest range of products available from quintessential classics, such as the famous Levi's® 501® Original jean, to favorite fits and styles in their Red Tab and premium brand collections. Levis® has truly captured the attention, imagination and loyalty of generations of diverse individuals. The Levi’s® Brand participates in multiple 3-dimensional marketing apparel events and tradeshows all over the world, the largest of which will be the focus of this portfolio: MAGIC (Men’s Apparel Guild in California - now held in Las Vegas semi-annually, NV due to size). In the business of fashion, MAGIC is one of the most important tradeshows in the world, with 100,000 plus attendees and over 20,000 products lines from 3,200 companies. U.S. Levi’s® Brand Portfolio LS&Co. owns and manages a broad brand and sub-brand portfolio. For the purposes of this portfolio, the US Brands and Sub-brands are of concern as follows: Brand / Sub-Brand Commercial Brands Brand / Characteristics / MSRP Levi’s® Red Tab - category defining and original, $40-$54 Levi’s® SILVERTAB® - contemporary/fashionable, $48-$54 Levi’s® Tab Twills - commercial non-denim, $44 Premium Brands Levi’s® Red - stylish and innovative, $68 - $78 Levi’s® Capital E - luxurious, handcrafted jeans, made in the US, $110 - $375 Levi’s® Vintage Clothing - celebration of heritage, $154 - $501 CTSM Portfolio / Michael Mecham Page 6
These brands and sub-brands comprise the entire portfolio for the Levi’s® Brand Business U.S. Unit. LS&Co. offers additional brands in the US (Dockers®, Dockers® Golf & Resort, and Levi Strauss Signature - which is sold in MASS Channel retailers such as Target and Wal-Mart) but they will not be a focus of this portfolio. Likewise, similar brands are managed in the LS&Co. Europe and Asian Business Units – which creates the corporate triad of business units. U.S. Levi’s® Brand Growth Initiatives The US Levi’s® Brand is all inclusive for consumers from stylish urban trend setters looking for premium fits and finishes to rural farm and ranch consumers looking for quality and durability. The company is inherently masculine with a strong tie to Western Heritage culture. However, the current growth initiative is in the more premium market segments ($60-$78/pair) with a strong focus on becoming the choice for Women as well as Men age 15-25. Additionally, the company is focusing on growing beyond jeans by increasing market share in tops for Men and Women as well as fashion for Kids, shoes, accessories, and home goods. U.S. Levi’s® Brand Competition Competition in the apparel market has recently intensified, particularly in the denim market segment as jeans are becoming fashionable for diverse wearing occasions. In the US, the Brand competes both as a Wholesaler (selling goods through retailers such as Macy’s, JCPenney, and Kohl’s) and as a Retailer (selling goods through owned and operated Levi’s® Stores) in the vertical channel. Refer to the chart below for an overview of sample competitors by channel and distribution: Channel Sample Distribution Sample Competitors Wholesale: Department Stores Chains Multi-Brand Specialty Stores Macy’s, Dillard’s JCPenney, Kohl’s, Sears, Mervyn’s Pac Sun, Urban Outfitters Private Label, Lucky, Guess, DKNY, CK Private Label, Vanity Fair Lucky, AG, Union Bay, Diesel Retail: Levi’s® Owned and Operated Stores selling premium, classic, and iconic goods Gap, Lucky, Guess, Abercrombie & Fitch, Diesel It is fair to say that Vanity Fair - who owns Lee, Wrangler, Earl Jeans, and now 7 For All Mankind - is the second largest share holder and our strongest competitor in wholesale. Additionally, “private label” jeans, or jeans brands developed and marketed by our customers (i.e., Macy’s, JCPenney’s), are quickly becoming large market share holders in the denim segment. While the brand works to protect its market share in wholesale, the retail business continues to grow rapidly and the organization intends to get from 40 stores to at least 250 in the next 20 years. CTSM Portfolio / Michael Mecham Page 7
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Page 33 and 34: RETURN ON OBJECTIVES SUMMARY Object
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CTSM Portfolio / Michael Mecham Page 1

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