LEVI STRAUSS & Co.

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The privately held clothing company known worldwide for its Levi’s brand of denim jeans. It was founded in 1853 when Levi Strauss came from Bavaria, Germany to San Francisco, California to open a west coast branch of his brothers’ New York dry goods business. Levi Strauss was born Loeb Strauss in Buttenheim, in the Franconian region of Bavaria, Germany, to Hirsch Strauss and his wife Rebecca (Haass) Strauss. At the age of 18, Strauss, his mother and two sisters sailed for the United States to join his brothers Jonas and Louis, who had begun a wholesale dry goods business in New York City called J. Strauss Brother & Co. By 1850, Strauss was calling himself Levi. The family decided to open a West Coast branch of the family dry goods business in San Francisco, which was the commercial hub of the California Gold Rush. Levi was chosen to represent the family, and after becoming an American citizen in January of 1853, he got on a California-bound steamer which left New York for the isthmus of Panama around February 5, 1853.

He crossed the isthmus and then caught another steamship for San Francisco, arriving in early March, 1853. Strauss opened his dry goods wholesale business as Levi Strauss & Co. and imported fine dry goods – clothing, bedding, combs, purses, handkerchiefs – from his brothers in New York. He sold the goods to the small general stores and men’s mercantiles of California and the West. Around 1856 Levi’s sister Fanny, her husband David Stern and their infant son Jacob moved from New York to San Francisco to join the business. In late 1870 Jacob Davis, a Reno, Nevada tailor, started making men’s work pants with metal rivets at points of strain for greater strength. He wanted to patent the process but needed a business partner, so he turned to Levi Strauss, from whom he purchased some of his fabric. On May 20, 1873, Strauss and Davis received United States patent #139121 for using copper rivets to strengthen the pockets of denim work pants. Levi Strauss & Co. began manufacturing the famous Levi’s brand of jeans, using fabric from the Amoskeag Manufacturing Company in Manchester, New Hampshire. In his later years Levi expanded the tradition of philanthropy which he had begun soon after his arrival in San Francisco. For example, he was a Vice President of the Society for the Prevention of Cruelty to Children  and gave money to a number of disaster relief efforts, such as the great Chicago Fire. In 1897 he established scholarships for poor students at the University of California, Berkeley. Levi Strauss died in 1902 at the age of 73. He never married, so he left the business to his four nephews, Jacob, Sigmund, Louis and Abraham Stern, the sons of his sister Fanny and her husband David Stern. He also left bequests to a number of charities such as the Pacific Hebrew Orphan Asylum and the Roman Catholic Orphan Asylum. Levi’s fortune was estimated to be around 6 million dollars. He was buried in Colma, California. Mr. Strauss was inducted into the Junior Achievement U.S. Business Hall of Fame in 1994.

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Although the company began producing denim overalls in the 1870s, modern jeans were not produced until the 1920s. The company briefly experimented (in the 1970s) with employee ownership and a public stock listing, but remains owned and controlled by descendants and relatives of Levi Strauss’ four nephews. Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss, North Americas, based in the San Francisco headquarters; Levi Strauss Europe, based in Brussels; and Asia Pacific Division, based in Singapore.The company employs a staff of approximately 8,850 people worldwide, and owns and develops a few brands. Levi’s, the main brand, was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion. From the early 1960s through the mid 1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 60s and 70s ushered in the “blue jeans craze” and served as a catalyst for the brand. Levis, under the leadership of Jay Walter Haas Sr., Peter Haas Sr., Paul Glasco and George P. Simpkins Sr., expanded the firm’s clothing line by adding new fashions and models, including stoned washed jeans through the acquisition of Great Western Garment Co. a Canadian clothing manufacturer, acquired by Levis. GWG was responsible for the introduction of the modern “stone washing” technique, still in use by Levi Strauss. Mr. Simpkins is credited with the company’s record paced expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants nationwide from 1964 through 1974. Perhaps most impressive, however, was that Levis’ expansion under Simpkins was accomplished without a single unionized employee as a result of Levis’ and the Hass families’ strong stance on human rights and Simpkins’ use of “pay for performance” manufacturing at the sewing machine operator level up.

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As a result, Levis’ plants were perhaps the highest performing, best organized and cleanest textile facilities of their time. Levis even piped in massive amounts of air conditioning into its press plants, which were known in the industry to be notoriously hot, for the comfort of Levis’ workers. 2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down.Dockers was launched in 1986. Sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Levi Strauss attempted to sell the brand in 2004 to relieve part of the company’s $2 billion outstanding debt. Launched in 2003, Levi Strauss Signature features jeanswear and casualwear. In November 2007, Levi’s released a mobile phone in co-operation with ModeLabs. Many of the phone’s cosmetic attributes are customisable at the point of purchase. Jacob Davis was a tailor who frequently purchased bolts of cloth made from hemp from Levi Strauss & Co.’s wholesale house. After one of Davis’ customers kept purchasing cloth to reinforce torn pants, he had an idea to use copper rivets to reinforce the points of strain, such as on the pocket corners and at the base of the button fly. Davis did not have the required money to purchase a patent, so he wrote to Levi suggesting that they both go into business together. After Levi accepted Jacob’s offer, on May 20, 1873, the two men received patent #139,121 from the United States Patent and Trademark Office. The patented rivet was later incorporated into the company’s jean design and advertisements. Contrary to an advertising campaign suggesting that Levi Strauss sold his first jeans to gold miners during the California Gold Rush (which peaked in 1849), the manufacturing of denim overalls only began in the 1870s. Modern jeans began to appear in the 1920s. In the 1950s and 1960s, Levi’s jeans became popular among a wide range of youth subcultures, including greasers, mods, rockers, hippies and skinheads. Levi’s popular shrink-to-fit 501s were sold in a unique sizing arrangement; the indicated size was related to the size of the jeans prior to shrinking, and the shrinkage was substantial. The company still produces these unshrunk, uniquely sized jeans, and they still sell very well. By the 1990s, the brand was facing competition from other brands and cheaper products from overseas, and began accelerating the pace of its US factory closures and its use of offshore subcontracting agreements. In 1991, Levi Strauss faced a scandal involving six subsidiary factories on the Northern Mariana Islands, a US commonwealth, where some 3% of Levi’s jeans sold annually with the Made in the USA label were shown to have been made by Chinese laborers under what the United States Department of Labor called “slavelike” conditions.

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Cited for sub-minimal wages, seven-day work weeks with 12-hour shifts, poor living conditions and other indignities, Tan Holdings Corporation, Levi Strauss’ Marianas subcontractor, paid what were then the largest fines in US labor history, distributing more than $9 million in restitution to some 1,200 employees. Levi Strauss claimed no knowledge of the offenses, then severed ties to the Tan family and instituted labor reforms and inspection practices in its offshore facilities. The activist group Fuerza Unida (United Force) was formed following the January 1990 closure of a plant in San Antonio, Texas, in which 1,150 seamstresses (primarily Latina) some of whom had worked for Levi Strauss for decades saw their jobs exported to Costa Rica. During the mid and late 1990s, Fuerza Unida picketed the Levi Strauss headquarters in San Francisco and staged hunger strikes and sit-ins in protest of the company’s labor policies. The company took on multi-billion dollar debt in February 1996 to help finance a series of leveraged stock buyouts among family members. Shares in Levi Strauss stock are not publicly traded; the firm is today owned almost entirely by indirect descendants and relatives of Levi Strauss, whose four nephews inherited the San Francisco dry goods firm after their uncle’s death in 1902. Levi’s bonds are traded publicly, as are shares of the company’s Japan affiliate, Levi Strauss Japan K.K. In June 1996, the company offered to pay its workers an unusual dividend of up to $750 million in six years’ time, having halted an employee stock plan at the time of the internal family buyout. However, the company failed to make cash flow targets, and no worker dividends were paid. In 2002, Levi Strauss began a close business collaboration with Wal-Mart, producing a special line of “Signature” jeans and other clothes for exclusive sale in Wal-Mart stores until 2006.

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Levi Strauss Signature jeans can now be purchased at several stores in the US, Canada and Japan. The company is now Wal-Mart’s largest worldwide strategic partner, conforming to Wal-Mart’s business and labor practices. Levi Strauss & Co. closed 58 US manufacturing plants between 1981 and 1990, sending 25% of its sewing operations overseas. Levi’s accelerated US plant closings through the 1990s, closing its last US domestic plant (in San Antonio, Texas) in January 2004. According to the New York Times, Levi Strauss leads the apparel industry in trademark infringement cases, filing nearly 100 lawsuits against competitors since 2001. Most cases center on the alleged imitation of Levi’s back pocket double arc stitching pattern (U.S. trademark #1,139,254]). Levi’s has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies. By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years. Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s. After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007.Levi Strauss & Co. is a privately held clothing company known worldwide for its Levi’s brand of denim jeans. It was founded in 1853 when Levi Strauss came from Bavaria, Germany to San Francisco, California to open a west coast branch of his brothers’ New York dry goods business. Although the company began producing denim overalls in the 1870s, modern jeans were not produced until the 1920s. The company briefly experimented (in the 1970s) with employee ownership and a public stock listing, but remains owned and controlled by descendants and relatives of Levi Strauss’ four nephews. Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss, North Americas, based in the San Francisco headquarters; Levi Strauss Europe, based in Brussels; and Asia Pacific Division, based in Singapore.The company employs a staff of approximately 8,850 people worldwide, and owns and develops a few brands. Levi’s, the main brand, was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion. From the early 1960s through the mid 1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 60s and 70s ushered in the “blue jeans craze” and served as a catalyst for the brand.

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Levis, under the leadership of Jay Walter Haas Sr., Peter Haas Sr., Paul Glasco and George P. Simpkins Sr., expanded the firm’s clothing line by adding new fashions and models, including stoned washed jeans through the acquisition of Great Western Garment Co. a Canadian clothing manufacturer, acquired by Levis. GWG was responsible for the introduction of the modern “stone washing” technique, still in use by Levi Strauss. Mr. Simpkins is credited with the company’s record paced expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants nationwide from 1964 through 1974. Perhaps most impressive, however, was that Levis’ expansion under Simpkins was accomplished without a single unionized employee as a result of Levis’ and the Hass families’ strong stance on human rights and Simpkins’ use of “pay for performance” manufacturing at the sewing machine operator level up. As a result, Levis’ plants were perhaps the highest performing, best organized and cleanest textile facilities of their time. Levis even piped in massive amounts of air conditioning into its press plants, which were known in the industry to be notoriously hot, for the comfort of Levis’ workers. 2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down.Dockers was launched in 1986. Sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Levi Strauss attempted to sell the brand in 2004 to relieve part of the company’s $2 billion outstanding debt. Launched in 2003, Levi Strauss Signature features jeanswear and casualwear. In November 2007, Levi’s released a mobile phone in co-operation with ModeLabs. Many of the phone’s cosmetic attributes are customisable at the point of purchase. Jacob Davis was a tailor who frequently purchased bolts of cloth made from hemp from Levi Strauss & Co.’s wholesale house. After one of Davis’ customers kept purchasing cloth to reinforce torn pants, he had an idea to use copper rivets to reinforce the points of strain, such as on the pocket corners and at the base of the button fly. Davis did not have the required money to purchase a patent, so he wrote to Levi suggesting that they both go into business together. After Levi accepted Jacob’s offer, on May 20, 1873, the two men received patent #139,121 from the United States Patent and Trademark Office. The patented rivet was later incorporated into the company’s jean design and advertisements. Contrary to an advertising campaign suggesting that Levi Strauss sold his first jeans to gold miners during the California Gold Rush (which peaked in 1849), the manufacturing of denim overalls only began in the 1870s. Modern jeans began to appear in the 1920s. In the 1950s and 1960s, Levi’s jeans became popular among a wide range of youth subcultures, including greasers, mods, rockers, hippies and skinheads. Levi’s popular shrink-to-fit 501s were sold in a unique sizing arrangement; the indicated size was related to the size of the jeans prior to shrinking, and the shrinkage was substantial.

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The company still produces these unshrunk, uniquely sized jeans, and they still sell very well. By the 1990s, the brand was facing competition from other brands and cheaper products from overseas, and began accelerating the pace of its US factory closures and its use of offshore subcontracting agreements. In 1991, Levi Strauss faced a scandal involving six subsidiary factories on the Northern Mariana Islands, a US commonwealth, where some 3% of Levi’s jeans sold annually with the Made in the USA label were shown to have been made by Chinese laborers under what the United States Department of Labor called “slavelike” conditions. Cited for sub-minimal wages, seven-day work weeks with 12-hour shifts, poor living conditions and other indignities, Tan Holdings Corporation, Levi Strauss’ Marianas subcontractor, paid what were then the largest fines in US labor history, distributing more than $9 million in restitution to some 1,200 employees. Levi Strauss claimed no knowledge of the offenses, then severed ties to the Tan family and instituted labor reforms and inspection practices in its offshore facilities. The activist group Fuerza Unida (United Force) was formed following the January 1990 closure of a plant in San Antonio, Texas, in which 1,150 seamstresses (primarily Latina) some of whom had worked for Levi Strauss for decades saw their jobs exported to Costa Rica. During the mid and late 1990s, Fuerza Unida picketed the Levi Strauss headquarters in San Francisco and staged hunger strikes and sit-ins in protest of the company’s labor policies. The company took on multi-billion dollar debt in February 1996 to help finance a series of leveraged stock buyouts among family members. Shares in Levi Strauss stock are not publicly traded; the firm is today owned almost entirely by indirect descendants and relatives of Levi Strauss, whose four nephews inherited the San Francisco dry goods firm after their uncle’s death in 1902. Levi’s bonds are traded publicly, as are shares of the company’s Japan affiliate, Levi Strauss Japan K.K. In June 1996, the company offered to pay its workers an unusual dividend of up to $750 million in six years’ time, having halted an employee stock plan at the time of the internal family buyout. However, the company failed to make cash flow targets, and no worker dividends were paid. In 2002, Levi Strauss began a close business collaboration with Wal-Mart, producing a special line of “Signature” jeans and other clothes for exclusive sale in Wal-Mart stores until 2006. Levi Strauss Signature jeans can now be purchased at several stores in the US, Canada and Japan. The company is now Wal-Mart’s largest worldwide strategic partner, conforming to Wal-Mart’s business and labor practices. Levi Strauss & Co. closed 58 US manufacturing plants between 1981 and 1990, sending 25% of its sewing operations overseas. Levi’s accelerated US plant closings through the 1990s, closing its last US domestic plant (in San Antonio, Texas) in January 2004. According to the New York Times, Levi Strauss leads the apparel industry in trademark infringement cases, filing nearly 100 lawsuits against competitors since 2001. Most cases center on the alleged imitation of Levi’s back pocket double arc stitching pattern (U.S. trademark #1,139,254]). Levi’s has sued Guess?, Esprit Holdings, Zegna, Zumiez and Lucky Brand Jeans, among other companies. By 2007, Levi Strauss was again said to be profitable after declining sales in nine of the previous ten years. Its total annual sales, of just over $4 billion, were $3 billion less than during its peak performance in the mid 1990s. After more than two decades of family ownership, rumors of a possible public stock offering were floated in the media in July 2007.


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