Las Vegas Sun

November 15, 2018

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Levi’s scrambles with Slates line

SAN FRANCISCO -- Last December, after production had already begun on Levi Strauss & Co.'s new Slates men's dress pants and only months before the shipping deadline, the company halted production to change the fabric of half the product line, increasing the wool content by 10 percent.

The company says it made the switch only after finding it could use better fabric without increasing the price of the pants. A competitor, Alan Burks, senior vice president for marketing at Haggar Clothing Co. of Dallas, says Levi was simply scurrying after realizing that Slates looked too much like its unsuccessful Dress Dockers.

Whatever the rationale, the switch meant a scramble. Workers were leaving for Christmas, retailers had placed orders based on the original fabric and factories needed fabric to keep up production levels. Patterns no longer met specifications, and dye colors were off.

"Delivering the news was not a pleasant moment," recalled Rita Trumbo, merchandising manager. "I had a room of about 15 people who had put their hearts into the production start of Slates, and this was the last straw. I'm sure there were a lot of hallway conversations and bathroom conversations that were not flattering."

A decade ago, Levi Strauss stunned the clothing world by creating Dockers, casual pants that became a billion-dollar brand. But the company, perceived as one of the world's great merchants, is finding it is not so easy to duplicate that success.

It discontinued Dress Dockers last May after seven years, amid criticism that consumers were confused about the differences between Dockers and Dress Dockers. Sales of the line never exceeded $25 million, estimated Harry Bernard of Colton Bernard Inc., an industry consultant and analyst based in San Francisco.; Levi officials declined to disclose any financial information about Dress Dockers or the cost of developing Slates.

Now, Levi is having another try. Last August. it introduced Slates into 1,500 stores and -- correcting what it saw as an oversight in the introduction of Dress Dockers -- backed the new line with a $20 million marketing budget.

Levi created a new division solely for Slates -- only the third brand introduced in the company's 140-year history -- and hired more than 100 people full time to design and market the pants, which sell for $50 to $80 retail.

Levi Strauss, a privately held company with $6.7 billion in sales last year, estimates that Slates, as was the case with Dockers, will have $1 billion in sales worldwide in a decade (though inflation has makes that a more attainable goal).

Slates, the company says, will finally establish Levi as a market leader in the $1.9 billion men's dress pants market in the United States, a category that is being reconfigured by the new trend toward casual attire for men.

Jann Westfall, president of the Slates division, insists that Dress Dockers were a success and that Slates is a totally new line - with a different fit, higher quality and wider distribution - that will "awaken a sleeping giant of a category that we think has enormous potential."

Indeed, in its marketing, Levi Strauss seeks to position Slates somewhere between dress and casual pants, equal to either role.

Haggar -- which this month is introducing a segment-straddling product of its own, called the Ultimate Pant -- says Levi's roll out has been fraught with missteps and, combined with the earlier Dress Docker episode, simply shows that Levi does not understand the dress pants market.

"I guess we'll see if the consumer is as dumb as they think they are," said Burks.

Others say Levi Strauss -- with its 18 months of dithering over details from buttonhole sizes to belt-loop widths and its cover-all-bases approach to Slates -- is showing it is not just a jeans manufacturer. At a time when Levi's jeans and Dockers khakis are facing stepped up competition from private-label brands, Levi is using its deep pockets and marketing muscle to open new niches.

"Levi is a great brand, but they are in a business where their products have been easily duplicated," said Douglas A. Christopher, a retailing analyst with Crowell Weedon, a brokerage firm in Los Angeles.

Competitors predict that success will not come easy for Slates because of the growing complexity of the dress pants market, already dominated by companies like Haggar, Farah Inc., based in El Paso, and Banana Republic, based in San Francisco, a unit of Gap Inc.

"The changing workplace environment for men is making it difficult to figure out what the heck they want to wear," said Peter Simon of NPD Group, an apparel research firm in Port Washington, N.Y.

Indeed, the story of how Levi introduced Slates illustrates an almost comical level of confusion about what this new line should be. Not to mention high anxiety.

Consider the nits that were picked just to come up with the Slates name. The division's marketing group spent four months sifting through 10,000 possibilities looking for a name that it could trademark globally and that could be pronounced in most major languages. It wanted a name that was somewhat masculine and formal -- and something that ended in the letter s, because the company's two other brand names, Levi's and Dockers, end in s.