It's all in the jeans

ON HIS previous business trips to Singapore, Nuholt Huisamen, then managing director for Levi Strauss & Co's African, Middle Eastern and Pakistan markets, was often struck by the high number of outer wear such as denim jackets that were sold at local Levi's outlets.

He finally understood why customers were snapping up these jackets when he relocated to Singapore in 2016, to serve as MD for the Australia-New Zealand, South-east Asia, Sub-Saharan Africa and Pakistan markets.

"I could never comprehend those figures, given Singapore's tropical climate, but now I do. The air-conditioning in offices is so cold, that everyone needs a jacket. It gave me good insight into how apparel brands position themselves," says Mr Huisamen.

Taking back the reins

These days, the South African has bigger things on his mind, such as how to bring the iconic brand to the next level. In April 2019, Levi's ended its 55-year-long distribution deal with the Jay Gee Group.

Says Mr Huisamen: "We parted amicably and both companies are still good friends."

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It was not a decision made at the spur of the moment, but one that took a year of discussions. "It was something that we had to do," he adds.

During Levi's early days, its jeanswear was sold through wholesale channels such as department stores in the United States. And when the American firm expanded overseas, it sold its products via partners such as the Jay Gee Group.

"Over time, the company evolved and more recently our strategies pivoted increasingly into owned and operated retail, into what we call direct-to-consumer channels. The company as a whole has a deliberate strategy to own and operate our stores and brands," he says.

Levi's is sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites, and the company has a global footprint of about 3,100 retail stores and shop-in-shops.

Regionally, countries such as Malaysia, the Philippines, Indonesia, India, China and Japan already have stores that are owned and operated by Levi's.

"It was ironic that Singapore being the flagship city that it is, and that our regional head office is also here, that we had a distributor running the brand. So we decided to buy the brand back," says Mr Huisamen. "We are very grateful for what Jay Gee has done, and they did a great job. But it is time for us to step in and elevate the brand to where we think it can be."

He declines to reveal the cost of the buy-back, but says "it is a big investment and it shows our commitment to the Singapore market", adding, "we want to give it the treatment that it deserves".

Operations-wise, things have to be done differently. Whereas there used to be one employee managing the distributor, since the buy-back, the firm has had to hire a whole suite of personnel, including a country manager and a marketing team among other roles. Its floor staff now report to the company.

"By bringing everything in-house, from the staff training to hiring stylists, we are in a better position to bring the brand alive," he says. At the end of the day, the company now has better control of how they want to sell their products and to market the brand.

Eagle-eyed shoppers may have already noticed some differences when they step into Levi's stores. Mr Huisamen cites the example of how previously, there would be discount signs on display almost every day in the stores. The firm has now cut that back by half, so "we only do end-of- season promotions, rather than have them too often. The brand perception is stronger when the items are not always on sale", he says.

Previously, the merchandising was more promotion-driven; "they are now brand-led", says Mr Huisamen. "If a collection drives the brand harder, we put it at the front of the store, because that is the right thing to do."

Customer experience

Next up on the agenda is finding the right location to build what the company calls its NextGen store here in Singapore.

Such outlets - which are already in cities such as Melbourne and Shanghai - are "stores where people go not just to buy a pair of jeans", says Mr Huisamen. "It is a completely different shopping experience. You go there to immerse yourself in the brand."

The NextGen store will have a Tailor Shop at its heart, where all kinds of customisations from alterations to personalising apparel by stitching on patches or embroidery, can be done.

It will also have a digitally focused design such as bigger, bolder and simpler visuals with signage to help customers navigate the store, and see the various fits on offer.

"I've looked at some sites, but there has been nothing suitable as yet. The NextGen flagship store has to be in a prominent location, have a strong shopfront and be of the right size," says Mr Huisamen.

Taking on the pandemic

Like many retailers, Levi's has also felt the impact of the coronavirus pandemic. Its third quarter revenue for 2020 was US$1.1 billion, down 27 per cent as compared to the previous year. The decrease was primarily due to the impacts of the Covid-19 pandemic, including reduced traffic and ongoing closures of company-operated and third-party retail locations for portions of the quarter and in certain markets, according to its financial report.

For markets that Mr Huisamen oversees, it has been a mixed bag of results. "Markets that responded better are the same ones that handled the pandemic well, such as in Australia and New Zealand." he says. On the other hand, the Philippines and Indonesia didn't fare as well.

"The good news, however, is that in Southeast Asia, the fundamentals are still strong. We came off 2019 on high double-digit growth, then Covid-19 happened. But looking at the region's population size, age, and GDP, all these factors point to a buoyant marketplace once the pandemic is over," he adds. "I'm optimistic about South-east Asia."

In Singapore, the company closed four stores, mainly because "we felt the brand was too densely represented in an area", says Mr Huisamen. He adds that its heartland stores have also fared better than those that draw a bigger tourist crowd. "Besides, our weekday sales compared to the weekends have gone up by 10 per cent," he notes. It has about 20 stores in the residential heartlands.

Digitising the business

But amidst reports of lower revenue, there is some good news. Levi's global e-commerce revenue growth of 52 per cent partially offset the business decline, while the company's global digital revenues (which include as well the online business of its pure-play and traditional wholesale customers) grew about 50 per cent over the previous year, and comprised around 24 per cent of third-quarter 2020 revenues, double what it was a year prior.

E-commerce isn't new for the company but the pandemic has highlighted how much potential digitising the business can have. Last October, Levi's announced new senior leadership changes to elevate the brand, unlock commercial potential through continued diversification and accelerate its digital transformation.

In Singapore, Levi's recently upgraded its website with useful features such as a realtime counter of product stocks, as well as video tutorials on how to make distressed jeans, or repair a tear.

According to Mr Huisamen, 80 per cent of offline purchases stem from online exploration. Going digital is more than just having an online store. "We need to be where the youths are. Youths are always on their phones so we need to connect with them via social media platforms, like Instagram and Tik Tok or through digital campaigns, to drive them to purchase online or to the stores."

He sees being online as complementary to having a NextGen store. "The store is still needed, because people like to try things on. The website is like a showroom, where customers can see what they want and they know what they want when they get to the store," he says.

At the time of this interview, Robinsons had just announced its impending closure. While Levi's did not have a counter at Robinsons, it is sold at department stores such as Isetan, BHG, Takashimaya and OG.

Mr Huisamen says he would be lying if he says the closure of Robinsons did not bother him. In 2019, American retailers Neiman Marcus and JCPenny also announced they would be shuttering stores.

"Are we worried about the closures of department stores? We are watchful," he says. "We see pockets in Europe and Australia where selling through wholesale partners is strong. So although we are pivoting to direct-to-consumer stores, department stores are still a big part of our business."

He says the key is "to manage wholesale like retail, and not just sell to department stores and walk away". The company treats its presence in store outlets like a mini version of its NextGen stores. "We own the assortment that goes on the floor and we manage the staff there. When you leave it to the department store on how to sell our products, then it is worrying."

Jeans inventor to market leader

Levi Strauss was an immigrant from Bavaria who opened a dry goods company in San Francisco at the height of the California Gold Rush in 1852. The story goes that while working, he saw a need for clothes to endure anything. He worked with a tailor to combine copper rivet reinforcements with tough denim, resulting in the first manufactured waist overalls in 1873. Those overalls are what we now call blue jeans.

What was designed for the American gold miner is now worn by everyday men and women. It is said that half the world's population wears jeans. "Pre-pandemic, the trend for casualisation was already there. People wore less suits and more casual clothes to work. With more people working from home, that trend has increased, so we see it as a huge opportunity for us to grow," says Mr Huisamen.

Search online for the bestselling and most popular jeanswear brands and Levi's constantly comes out tops. Mr Huisamen says there is still plenty to do to stay ahead of the competition, starting with the perception of the brand.

"When you talk to a youth, they either know or don't know the brand. To them, Levi's is the brand their fathers wear and it is a perception that we want to change," he says.

And those who think they know the brand often think of it as a men's bottoms business. "They don't know that 40 per cent of sales is for women, and that tops and accessories make up 20 per cent of our sales," says Mr Huisamen. "There is still a lot of potential for us."

The youth market is largely what the company is focusing on, hence the building of NextGen stores and digitising the business. It is also going after the youth market with products that appeal to them.

One way it does that is by collaborating with other iconic brands, to extend beyond its denim apparel range. In Singapore, it recently launched a collection with Disney, featuring its trucker jackets, sweatshirts and tees with colourful and retro prints of Mickey Mouse and Goofy. Its collection with Lego has tops and accessories that allow wearers to attach Lego pieces to them, creating their own personalised outfits.

Levi's constantly takes inspiration from youth-inspired trends. For example, today's young people prefer a slouchy and relaxed look, and to meet that demand, the company introduced more relaxed cuts into its product range.

Besides a global merchandising team, Levi's also has teams in China and India that develop products specifically tailored to the Asian market. "We have come a long way from being US-centric to a more international brand," says Mr Huisamen. "Sixty per cent of our revenue comes from outside the US."

Focus on sustainability

Sustainability is another area the brand leads in. "It is our best-kept secret," says Mr Huisamen. "Levi's has done it for the longest time, we are just not very good at talking about it."

Since 2011, Levi's has established more than 20 different manufacturing techniques that give its jeans that broken-in and feel from day one, but using significantly less water. Cotton makes up 90 per cent of its raw materials, and Levi's has taken steps to use sustainably farmed cotton that is grown with less water and fewer pesticides.

It has also introduced Cottonised Hemp into its collection. Hemp grows quicker and uses less water, and its yarn is as soft as cotton. And regardless of the material or its style, Levi's encourages its customers to repair or repurpose rather than throw out an item.

Looking back at his 17 years with the company, Mr Huisamen says he has been fortunate to be given the opportunity to take on different roles. "Every day, I still feel good going to work. Yes, there are challenges but they are good challenges," he says. Not surprising, the father of three wears only Levi's to work, and it is the preferred label for the family.

Mr Huisamen confesses to owning about 100 pairs, which already sounds like plenty. "I've worked with colleagues who have garages full of Levi's jeans. You can never seem to part with a Levi's item, so they accumulate over time, and become a collector's item."

He looks back at his four years in Singapore as being rewarding, particularly with the buy-back. "This buy-back provides the springboard to how we can elevate the business. I won't be satisfied until we have evolved the business to the next level."

As Mr Huisamen sees it, the pandemic is but a temporary setback. "In times of crisis, people turn to the brands they trust," he says.

NUHOLT HUISAMEN

Managing Director, ASP Region, Levi Strauss & Co

1972: Born in South Africa

EDUCATION

Bachelor of Commerce, University of Pretoria

MBA, University of South Africa

CAREER

2001-2003: Demand Planner, Distell

Within Levi Strauss & Co:

2003-2008: Strategic Planning Director

2008-2012: Sales Director

2012-2016: Managing Director, Africa, Middle East & Pakistan

Since 2016: MD, ANZ, SE Asia, Sub-Saharan Africa & Pakistan