Levi’s To Bow Out Of E-Commerce

After years of declining sales and business reversals, Levi Strauss & Co. announced today that it will cease selling products on its Levi’s and Dockers Web sites after Christmas.

The company decided that “during the past year, it became clear to us that the cost of running a truly world-class e-commerce business is unaffordable right now as we look at other competing priorities.”

Levi’s launched its e-commerce effort about one year ago with great fanfare, causing bad feelings among some of its retail partners who had previously been barred from selling Levi’s and Dockers products on the Internet.

Despite the acrimony, Levi’s went ahead with sales efforts on levi.com and dockers.com, to the detriment to its bottom line.

This latest misstep in Levi’s marketing strategy further damages its image in the increasingly competitive casual-wear and jeans industry, particularly when so many of its competitors are gearing up for record holiday sales on their own Web sites.

Shifting Focus

Levi Strauss’ move away from online sales is the culmination of three years of consistently declining sales. In fact, the company may suffer its first net loss this year in more than a decade.

Meanwhile, as Levi’s repositions itself for recovery from the high costs and low sales from its e-commerce endeavor, J.C. Penney will begin selling Levi’s and Dockers merchandise in time for Christmas. Additionally, Macy’s will offer Levi’s and Dockers after Christmas.

Even Giants Get The Blues

Levi’s, still one of the most identifiable product names in the U.S., closed 11 of its 22 owned and operated North American plants. The move affected 30 percent of the company’s workforce in the U.S. and Canada, as 5900 employees were laid off. The cost to the company was about $245 million (US$).

Just last month, the company introduced an interactive shopping experience on levi.com in what now appears to have been a final effort to engage potential customers and pump up the bottom line. The online campaign employed experiential technology for users and special promotions with prize offerings.

A San Francisco, California firm, USWeb/CKS, managed the Levi Strauss e-commerce business, and according to Levi’s, the relationship between the two companies remains intact.

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