How Chip Bergh Made Levi’s Cool—And Profitable—Again
When former Levi’s CEO Chip Bergh was a middle-schooler, he wanted Levi’s jeans so badly he asked his mom to drive two towns over to buy him some. (“All the cool kids were wearing them to school.”) And when he took the reins of the company in 2011, in his mind it was still one of the most iconic brands in the world.
But when he started talking to friends and neighbors about Levi’s, he got answers like, ‘Gosh, I loved Levi’s growing up, but I can’t even remember the last time I bought them. Is it still around?’ “It was as if the brand had just vanished off the face of the map… We had lost a whole generation of consumers,” Bergh said.
He learned that the company had peaked in 1996 at $7.1 billion in sales, followed by a steep drop to $4 billion over the next five years. Shareholder value continued to decline, and the company was saddled with debt. But during Bergh’s tenure, he managed to turn the legendary denim maker around.
Now Levi’s Executive Vice Chairman (he stepped down as CEO in January), Bergh described his memorable retailing journey to students at a recent Baker Executive Speaker Series event, in conjunction with Penn Fashion Week.
“I Had No Retail Experience, But I Was a Brand Guy”
Before Bergh found himself at the helm of Levi’s, his wheelhouse was very different: consumer packaged goods like coffee, mops, and cleaning products. He logged 28 years at Procter & Gamble in brand management, general management, and executive leadership. (If you have a Swiffer in your house, it’s thanks to Chip Bergh.)
Bergh shared lessons from his successful career at P&G, including one involving Folgers coffee. He explained how in the 1990s, companies were “ultrafying” products: taking the water or air out of items to make shipping more efficient. P&G introduced Ultra Tide, Ultra Joy, and Ultra Pampers, among others. Bergh’s boss wanted to lead the coffee industry in “ultrafying” coffee—a move Bergh referred to as a “disaster.”
“It was a six-ounce can of coffee with itty bitty teeny scoops in it that would produce the same number of cups as a 13-ounce can. It was a huge consumer habits change—and there was really nothing in it for them,” he said.
Despite a failing test market, Bergh’s supervisor clung to the idea. Bergh decided to go over his head. “I remember [worrying that] this could be my last day with the company… But the data won the day, and we shut the project down.” He called the experience a “big unlock” for him in terms of taking a stand on important business issues—especially when the numbers back you up.
171 Years of Doing the Right Thing
Once at Levi’s, Bergh knew he had to work to make the brand “cool” again as it was when he was younger. One of the earliest moves he made—an expensive gamble—was to buy the naming rights to what is now Levi’s Stadium, home to the San Francisco 49ers. His reasoning for the purchase had been, “We’ve got to put Levis back at the center of culture. Well, what’s culture?: Sports, music, entertainment. And what happens in big football stadiums? Sports, music, entertainment.”
The gamble paid off, with what Bergh said has been “an amazing collaboration.” He added that in more recent years, the social media impact of having the stadium has been huge: people attending events there post Instagram photos with Levi’s branding in the background.
Bergh also emphasized what he views as part of the 171-year-old company’s ethos: doing the right thing on social issues. It started with founder Levi Strauss, an immigrant who donated a portion of his first-ever profits to an orphanage. Over the years, the business has taken sometimes controversial public positions, often before many other brands have acted.
He noted that the company desegregated its factories in the South ten years before the Civil Rights Act; was the first major U.S. company to give healthcare benefits to same-sex partners; was an early voice in the fight to end AIDS; and publicly opposed the 2017 immigration ban against majority-Muslim countries. Moreover, Bergh has openly supported common-sense gun legislation (a stance for which he has endured threats and harassment on social media). This kind of public track record—besides being ethically important—“attracts great talent” to the organization, he said.
To Wash, Or Not To Wash (Your Levi’s)?
Bergh is sometimes credited with saying he never washes his jeans, a statement that scandalizes and amuses many people. It was actually a misquote, he asserted. “What I said is that my jeans have never seen the inside of a washing machine.” He explained that he mostly spot-cleans his Levi’s, and when they get very dirty, he gets in the shower with his pants on. “I wash them the way I did when I was backpacking around Europe as a young, broke second lieutenant staying in youth hostels.”
For those still scandalized and amused, Bergh noted that in the U. S. we greatly overconsume water, tending to launder clothes every 1.2 wearings. He chuckled, “You don’t need to wash your jeans that much, folks!”
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