On the Levi’s retailer on San Francisco’s Market Avenue, the denim maker’s new assortment is on full show. Its mannequins are dressed head to toe in its signature denim. Black denim overalls paired with a light-weight blue long-sleeved denim shirt and a cowboy hat. One other wore a denim cross-body bag. A wall of blue denim jackets permits consumers to decide on whether or not they’re a hippie, rancher or rock star – relying on their alternative.

“It’s not simply wall after wall of denims,” mentioned Michelle Gass, days earlier than she turned chief government of Levi Strauss & Firm, as she browsed the shop this month. government officer. Levi’s tops are being produced quicker than prior to now and are on par with the shop’s stock of denims.

That day, Ms. Gass’s clothes additionally mirrored the corporate’s objectives. She traded in her signature black leather-based jacket from her days as CEO of Kohl’s for a dark-wash Levi’s trucker jacket and a ’90s-inspired midi-length denim skirt.

Ms. Gass, 55, needs to make Levi’s not solely the model you consider once you need denims but in addition the primary place you go to purchase shirts, jumpsuits and puffer jackets. Her aim is to maintain clients coming again extra usually — since individuals sometimes purchase tops extra usually than bottoms — and convey them to Levi’s shops, its web site and cell app.

“While you construct a retailer and create an e-commerce website, shoppers wish to discover and purchase greater than only a pair of denims,” Ms. Gass mentioned.

This strategy is a key consider remodeling the 171-year-old clothier into a real retailer reasonably than a model promoting its items primarily in different firms’ shops.

Gross sales via its direct-to-consumer channel, identified within the business as DTC, rose 11% in the newest quarter, whereas Levi’s gross sales via retailers together with Macy’s, Kohl’s and Amazon fell 2% . The corporate’s total gross sales in 2023 had been flat in contrast with the earlier yr.

It is a powerful math drawback dealing with Levi’s as buyers proceed to count on development from it. Final yr, income was $6.2 billion. In January, the denim firm advised Wall Avenue it deliberate to ultimately enhance whole gross sales to $9 billion to $10 billion. It didn’t set a selected goal date for doing so.

However Ms. Gass and her senior management staff are effectively conscious that its shops and the number of merchandise positioned there’ll play a big function in reaching that income goal. Inside six years, the corporate hopes to generate 55% of its income from direct-to-consumer operations, up from 42% at the moment.

“It actually makes this firm what I’d name a denim life-style retailer,” Ms. Gass mentioned. “It is a massive turning level.”

Levi’s shops usually are not new. In 1983, it opened its first retail retailer in Spain; the primary in the US opened in 1991 in Columbus, Ohio.

However the majority of the corporate’s gross sales nonetheless come from chains like Macy’s or Nordstrom. Since then, the best way consumers store has modified dramatically. As shops and malls wrestle in a rising e-commerce world, manufacturers like Levi’s and Nike have responded by beefing up their very own direct-to-consumer channels to attach extra intently with shoppers and hold a tighter rein on themselves s model.

“You’ll be able to showcase the model and the path you need the model to go,” Stifel retail analyst Jim Duffy mentioned of brick-and-mortar shops. “In a wholesale atmosphere this may be more durable to do as they have a tendency to promote the model as a commodity reasonably than a set.”

Levi’s at the moment has almost 2,300 shops worldwide, 244 of that are in the US. Final yr, the corporate opened a file variety of new shops: 105.

“Customers will purchase merchandise instantly from manufacturers,” Ms. Gass mentioned. “The general client development is towards actually wanting DTC experiences, after which we’ve the subsequent chapter, however we’re nonetheless very underdeveloped within the direct-to-consumer enterprise.”

With a purpose to rework into an organization that thinks like a retailer first, Levi’s needed to undergo some rising pains. Ms. Gass has recognized some. Over the previous yr, as she served as president of Levi’s and ready to succeed longtime CEO Chip Bergh, she visited the corporate’s shops in 15 markets. She has traveled to Asia six occasions.

From these journeys, she noticed the methods during which Levi’s enterprise was extra developed in different components of the world. In India, for instance, the corporate sells one shirt for each pair of bottoms it sells. In the US, there may be one shirt for each 4 pairs of denims. She needs to maintain the ratio equal.

She additionally concluded that choices could possibly be made quicker. It took 15 months to develop and ship the shirts—about the identical period of time because the denims—however was too sluggish to persistently entice consumers and encourage them to return. The corporate has recruited new suppliers and is accelerating the method.

It is also making seemingly small modifications. Levi’s denims are shipped folded to match the best way different retailers show them, however Levi’s personal shops show them otherwise. That left Levi’s retailer staff laboriously refolding the denims. The way in which orders are shipped to Levi’s shops now displays the best way the shops are displayed.

“In the end what you wish to do is spend much less time within the again and extra time in entrance of the shopper,” mentioned Steve Cano, who oversees Levi’s retailer technique. Mr. Cano joined the denim maker in 2022 after working at Apple for 20 years and opening shops in 14 international locations. “In an ideal world, you wish to eradicate all pointless duties,” he mentioned, so workers can give attention to serving to clients.

Levi’s is specializing in coaching and retaining retailer associates engaged by utilizing brief coaching movies just like TikTok, and is experimenting with methods synthetic intelligence may also help retailer associates reply buyer questions extra simply (“What are some great benefits of Japanese selvage denim?” ?”). It is also bettering its system to let distribution facilities know when hot-selling merchandise are bought out in shops — a significant frustration for consumers looking for their very own dimension. Transport merchandise from distribution facilities to shops has additionally been streamlined to make sure stock matches the season.

Right this moment, such practices have change into leverage for retailers. However it’s the subsequent evolution for a model that when misplaced its footing. A decade in the past, Levi’s confronted an existential disaster and wanted to introduce denim as younger individuals opted for leggings.

The corporate figured it out. They make stretch denims, open shops in upscale neighborhoods and capitalize on a second when Beyoncé wore 501-style cutoff shorts whereas performing on the 2018 Coachella Valley Music and Arts Competition. In 2019, it turned a listed firm for the second time, additional thrusting it into the highlight. Final yr, Levi’s was the best-selling denim model in the US and globally, in accordance with market analysis agency Euromonitor.

Inside its San Francisco headquarters, a set of denims, jackets and shirts dangle on cabinets. Daybreak Vitale, chief advertising officer of Levi’s, describes the most recent product line as a “denim life-style” the place individuals can put on full denim clothes. Denims vary in worth from round $60 to over $400 (for particular selvage denim), with some particular collaboration items costing much more.

The logic is that when Levi’s launches a brand new model of denims, they’ll present consumers close by shirts or jackets that match. “It is actually a gearing technique,” Ms. Vitale mentioned.

Nonetheless, its direct-to-consumer enterprise stays much less worthwhile than its wholesale enterprise as Levi’s expands its product choices to fill its shops. Ms Gass mentioned the corporate had a “aim” to extend profitability of its shops and e-commerce platform.

Levi’s is making an attempt to avoid wasting prices. Throughout its quarterly earnings name in late January, the corporate mentioned it might minimize its workforce by 10% to fifteen%, a transfer that might save $100 million this yr. Gass declined to say which positions had been being eradicated, however mentioned the corporate was seeking to “scale back organizational layers.” The corporate additionally mentioned it might discontinue manufacturing of 15% of its lowest-selling merchandise.

“We’re altering the best way we work,” she mentioned. “This working mannequin will search for all alternatives the place we will play a decisive function as a tradition.”

Ms. Gass mentioned Levi’s shops give the corporate a extra direct understanding of client wants and the flexibility to reply extra rapidly.

Messa Raja, 31, stumbled upon the Levi’s retailer in Manhattan’s SoHo district whereas on a enterprise journey from London this month. An enormous fan of Levi’s, she went in, browsed and acquired a pair of 501 denims. Just a few days later, she returned and acquired one other pair, together with a black Levi’s hat as a result of she did not have sun shades.

“I stumbled upon it the primary time, however I got here again to it at the moment,” she mentioned.

She mentioned she was impressed with the shop’s vary of choices and customer support.

Ms. Gass and different senior Levi’s executives mentioned Ms. Raja was the sort of buyer they envisioned for his or her shops.

Again on the San Francisco retailer, Ms. Gass continued to introduce merchandise and clarify how Levi’s is increasing.

“I go searching and it is nice, however I really feel like we’re simply getting began,” she mentioned.