Most Powerful Women Summit 2024: Beyond Blue Jeans
Michelle Gass, President and CEO, Levi Strauss & Co.
Interviewer: Ellie Austin, Fortune
Interviewer: Ellie Austin, Fortune
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TechTranscript
00:00Michelle Doss is the boss at Levi Strauss, one of the most recognizable and
00:04iconic brands in existence. She joined the company last year and now leads it
00:09as its first female CEO. Michelle's got big plans to take Levi's beyond just
00:13cool comfy jeans. She wants it to appeal to even more people and to help achieve
00:17that vision she's teamed up with another cultural icon,
00:21Beyonce. Michelle will join us in a moment to chat about this and more, but
00:25first let's take a look at Levi's collaboration with the one and only
00:28Queen Bee.
00:58Hello Michelle. Hi Ellie. It's not every day that you get to start a
01:08conversation with Beyonce, but that is where we're going to begin. So as Emma
01:13mentioned, last month you launched your Reimagine campaign with one of the
01:17world's most famous women and also a woman who is very selective about the
01:22projects she takes on. Now it was all started by the release of a song on her
01:26latest album called Levi's Jeans. I want you to tell us about the day that you
01:31learned about the existence of that song because I imagine it was a pretty good
01:34day for you. Yeah, it's sort of like a dream come true to have Beyonce name a
01:40song after your brand, like that's a once-in-a-lifetime moment. So we did get
01:46a little whisper literally just days before, not like months and months before.
01:51It was truly completely organic. You know the backstory is that she's been a fan
01:57of the brand for decades as we've been a fan of hers and way back when in the
02:0290s when she was part of Destiny's Child, believe it or not, we did outfit the
02:06group in Levi's way back then. We still have a pair of her jeans in the vault
02:10and so that relationship has just been sort of nurtured over time and so she
02:16made this decision to name a song on her Cowboy Carter album. It's spelled
02:21L-E-V-I-I-S. I did have a lawyer ask if we were worried about the trademark
02:26infringement. I'm like, are you crazy? This is like a gift. So but anyway, in all
02:32seriousness, we were all super excited and the team, once we learned it was
02:34going to happen literally kind of days before, moved very quickly. We changed our
02:39handle on all of our social media to represent the song and then it just kind
02:43of like went crazy. Had you had the song at that point? Oh yeah, I mean once it was
02:48released. Okay. Literally when it was released though, not sooner. But you
02:53know you don't have these moments very often obviously and so we really took
02:57the opportunity once we saw the reaction and the popularity of the song to say well
03:01maybe there's something more here and so a few weeks later a couple of us, myself,
03:06our head of marketing, our chief marketing officer, and our chief product
03:10officer had a dinner meeting in LA secretly to talk to a couple of her two
03:16key people and just sort of started to reimagine what was possible. Literally
03:20within weeks after that we you know came up with Kenny, who's our chief marketing
03:26officer, him and the team came up with a big idea around this to actually, I mean
03:30not only is it Beyonce, but it actually pulls from the heritage of the brand.
03:34It's a remake of very popular ads in the mid 80s. So you know the wonderful thing
03:39about Levi's is we've got all this incredible heritage so to take this and
03:43now move it forward with one of the world's biggest icons. So all of this
03:49happened literally within five months from the idea to finding the contract to
03:56weeks later doing the shoot and here we are launched. And it's been a great
04:01lesson also with the team as we become, and I will talk about this, but really
04:06become a retailer how you can move with speed and agility and capture these
04:11moments because they don't come around very often. They truly don't. And one more
04:14question on Beyonce before we move on. How are you measuring her impact? You
04:18mentioned to me about Beyonce's scorecards. Tell us. Yeah so we do, I mean
04:22we do have a scorecard and the last one I looked at, now we've only been live for
04:26two weeks, but we've had over 2.4 billion impressions. 2.4 billion. I mean when you
04:34think about, I still have a hard time getting my head around it, I mean this
04:37she is a cultural icon, a culture shaper. She's got over 300 million global
04:43followers. So it's just, it's incredible, it's a privilege, it's an honor. And like
04:49we've had a relationship with her for decades, you know our hope is that
04:52decades to come this particular campaign is happening in chapters. So that was
04:56chapter one. She is wearing a pair of 501s, but she will be wearing other
05:01things in the chapters to come. And I have to say Ellie, there's been a lot of
05:04questions about my jacket today. So I think we have to take the mystery away, but
05:12actually this was one of the many options that was created for Beyonce for
05:17the shoot. But she did not choose to wear it, so I get to wear it. But I will tell
05:24you, given all the feedback I'm getting at this conference, I suspect this will
05:27be in production here in the coming year. So stay tuned.
05:34So you joined Levi's last year as president and designated CEO, and then
05:41you spent a year working alongside your predecessor Chip Burke, and then at the
05:44start of this year you became officially CEO. Now that's an unusual and really
05:50interesting succession plan. Can you take us back to the conversations between you
05:54and Chip that led to that structure?
05:56Yes, absolutely. Well, I'd say it was unconventional, but quite intentional. And
06:02the unconventional piece was not only was it a, okay, I'm coming in, I'm going to
06:07take a year to learn the business, the culture, and importantly the team, but I
06:12was a sitting CEO at Kohl's for five years, and one of his biggest customers.
06:19And that's how I got to know him over a decade ago, because we sold a lot of
06:23Levi's and, you know, I instantly fell in love. I mean, I already was in love with
06:27the brand, but the company, the team, the values, everything it stood for. So as he
06:31started to think about retirement, he called me and just said, what do you
06:36think about this idea?
06:37And I think you were actually at NPW two years ago when you were having some of
06:40the-
06:40That was indeed two years ago. I think I was on the stage when I was still with
06:44Kohl's. But that's when it all started happening. It moved very quickly, but it
06:50was really important. I mean, when you think about Levi's, right, we're 171 years
06:56old. Tremendous responsibility, anybody who takes the mantle of leadership for
07:01this company. And for all of Levi's stakeholders, Chip, the board, the Haas
07:07family still owns over 70% of the business. It was really important to have an
07:10insider be able to transition and transition effectively. And I know it was
07:16unconventional. I got lots of questions. Wait, you're CEO of this big company, and
07:20then you're going to take this year. I viewed it as an unbelievable gift. And I
07:24encourage anybody who has that kind of opportunity. I think it was Patty who
07:27talks about the jungle gym and not the latter. I'm all about the jungle gym. I
07:32mean, if I think about my career, so many of the opportunities that were
07:35unconventional led to the biggest opportunities.
07:39Was it nerve-wracking? Was there ever a chance that you wouldn't get the top job
07:42during that year?
07:43There's always a chance. I mean, you know, you're not in it until you're in it. But,
07:49you know, like anything, there's a level of any kind of risk when you make a move
07:53like that. But I just so believed in the company, the brand, Chip, the team. And as
08:03soon as I landed there, it was like, oh my god, this is a dream come true. And I felt
08:06like all my experiences going back to Procter & Gamble, 17 years at Starbucks, a
08:11decade at Kohl's, having been a CEO, prepared me for this role, which is truly
08:17a dream job.
08:19Let's talk about numbers for a minute. So last year, Levi's reported revenue of
08:22$6.2 billion. Before you came on board, your predecessor had said that by the end
08:27of 2027, the company would hit $10 million in revenue. You've recently delayed that
08:33timeline. You've been really transparent about why, saying it's high cost of
08:37living, impacting consumer spending. At NPW, we talk about the high points and we
08:42also like to talk about more challenging moments. So how does it feel to have to go
08:46out there and publicly say, hey, we're not going to hit that target?
08:49Yeah. No, I mean, I think from when that target was announced, the world looked very
08:55differently. And we're a lot smarter today on all the headwinds that are happening
09:00around the world. So we haven't put a new date out there, but I have unbelievable
09:05conviction that we will become a $10 billion company. I mean, Levi's should be at
09:12least a $10 billion company. And we have clear line of sight on how to get there. I
09:16mean, when I go back to succession, when Chip joined 12 years ago, the company was
09:21in a tough state. The brand was in a tough state. He put the brand back in the center
09:25of culture, right? So I'm building a great foundation. That's how you get
09:29opportunities like that, right? We never take it for granted. But our growth is
09:33going to be to really go from being the best pair of blue jeans on the planet to
09:39head-to-toe denim lifestyle and selling lots of things like this and denim skirts.
09:44And the jumpsuit I was wearing yesterday and everything that complements it. And we're in
09:48the early chapters of this, right? We're going to become a true apparel company.
09:52And we're going to do that through direct-to-consumer or, said another way,
09:55retail through lots of stores. We actually have 3,000 stores globally. A
09:59lot of people are surprised by that because smaller here in the U.S., but in
10:03many parts of the world, we're seen as a retailer. And in our e-commerce business,
10:07you know, we're just getting started on that as well. So it's pretty incredible to
10:12be here with such a rich foundation. Again, 170 years, but feel like, you know,
10:19the next chapter is ahead of us and we're just getting started.
10:21We've only got a few more minutes. So I'm going to whip through a couple of things
10:24with you. One thing that you talk about a lot is winning with women because I
10:29think it's only a third of Levi customers at the moment who are women.
10:33So what does the company need to do to back to market to and
10:39serve the people in this room?
10:41Absolutely. Well, for many, many years, the legacy of the company was not only was it
10:46denim bottoms, it was guys' jeans, right? And so it takes time to not lose the core
10:53of who you are. So men are still very important to our business, but to evolve
10:58very thoughtfully so you can stand for something much bigger. And as I said, you
11:01know, having people really think about it as an apparel company or as we like to
11:05say a denim lifestyle company because it always does center with denim. But for
11:09women, it's a third of our business and that should be at least half of our
11:12business. I mean, just look at who a lot of the apparel shoppers are out there.
11:17And if you look at my husband's closet versus my closet, that would say, you
11:20know, there's a lot of consumers, female consumers to serve. And our data says
11:25actually when they're coming in the store online, they're actually buying
11:27stuff for, you know, guys as well often. But we're barely scratching the surface.
11:32Right. So first it's about having relevant bottoms, making it easier to
11:38shop denim bottoms. That can be very intimidating. So how are you going to
11:42make it easier? Through great tools and we're still working on them on our
11:46e-commerce, right? So fit navigation, find your favorite fit. What's your right
11:51size? Our stylists in the store, part of becoming a retail company is really
11:56thinking about the frontline first. And I'm really excited about the cultural
12:00changes we're making as well. I mean, this isn't just business transformation,
12:03it's cultural transformation to have people who work in, say, corporate to be
12:08thinking all the time, what can I do to serve that stylist who's going to in
12:13turn serve the customer? So back to having the female customer come in, you
12:17know, leading in fashion fits. So whether it's skinny, high waist, low waist, loose,
12:23baggy, like, you know, we want to help you find your next favorite Levi's. Tops,
12:28jackets, jumpsuits, skirts. I mean, we're barely in some of those categories, but
12:34the proof points are coming. So you look at our last couple quarters, women's has
12:38dramatically outperformed, and there's a big benefit of me being here for a year
12:43is to work with the teams to actually start addressing these new
12:48opportunities. So women have outperformed, you were saying? Yes, the last couple
12:51quarters outperformed. In the last couple of quarters. Absolutely. Started to implement some of
12:54these changes and expand product lines. Okay, there's lots more I want to
13:00touch on with you, but we are sadly at time. But Michelle is going to be with us
13:03for the afternoon and the evening, so I'm going to take the liberty of saying come
13:07find her to ask your questions about Levi's. Awesome. Thank you so much, Michelle,
13:11and also for the world's greatest jacket. All right, thanks, Ellie. Thank you.