1 year ago
71 Levi Strauss & Co. CEO Chip Bergh speaks astatine the CNBC Evolve league November 19th successful Los Angeles.
Jesse Grant | CNBC
As Levi Strauss & Co. searched for its adjacent leader, it got assistance from a astonishing source.
Levi CEO Chip Bergh said unit from activistic investors prompted Kohl's CEO Michelle Gass to see the job. On Tuesday, Levi announced that Gass volition articulation the institution successful January arsenic president and go main enforcement wrong 18 months.
"She's been done the wars," Bergh told CNBC. "It's 1 of the reasons we called her — and she wasn't retired looking. I deliberation the activistic situation, the information that they struck with another missive back successful mid to precocious September, benignant of created the conditions for her to instrumentality a telephone call."
Gass volition win Bergh, who has been its CEO since 2011. She declined to remark done Levi and Kohl's representatives.
Gass has led an embattled Kohl's, which has rebuffed repeated attempts by activistic investors to propulsion her out. The retailer's committee struck an statement past April with a radical of the investors by appointing 3 caller directors, including erstwhile Burlington Stores CEO Tom Kingsbury.
On Tuesday, Kohl's named Kingsbury its interim CEO.
Shares of Kohl's roseate and shares of Levi's fell connected the news.
By the numbers: Levi Strauss and Kohl's
Levi Strauss
- 16,600 employees
- 1,043 stores
- Sales successful fiscal 2021: $5.76 billion
Kohl's
- 99,000 employees
- 1,166 stores
- Sales successful fiscal 2021: $19.43 billion
Source: Company filings, FactSet
In her caller relation astatine Levi, Gass volition pb the iconic denim marque arsenic it works to merchantability much apparel straight to consumers done its ain stores and website. About 36% of full income came from nonstop income successful the retailer's astir caller fiscal twelvemonth ended past November. By 2027, Levi said it aims to grow its direct-to-consumer concern to 55% of full sales.
Levi is besides pressing beyond its signature jeans to merchantability much tops and activewear. It acquired apparel marque Beyond Yoga past twelvemonth and plans to astir treble gross from tops by 2027. It has benefited from a displacement to much casual covering due to the fact that of the pandemic and a caller manner rhythm that favors looser-fitting denim alternatively than skinny jeans.
Bergh said Gass is acceptable for the relation due to the fact that of her much than 2 decades of retail experience. He said he's known her for astir a decennary and watched arsenic she built brands, launched caller initiatives and led a retailer done the challenges of the pandemic.
Led by Gass, Kohl's has tried to triumph implicit caller customers and enactment a modern rotation connected the section store chain. It added Amazon returns astatine stores, expanded its online concern and opened hundreds of Sephora quality shops successful its section stores. It besides expanded its assortment successful athleisure — a inheritance that could assistance aft Levi's acquisition of Beyond Yoga.
Some Kohl's investors question whether those investments person paid off. The retailer slashed its full-year guidance successful August, citing softer request arsenic consumers get squeezed by inflation. On Tuesday, it shared preliminary third-quarter results. The institution anticipates comparable income to beryllium down 6.9% successful the three-month play ended Oct. 29 compared with the year-ago period.
Bergh, however, said Kohl's changes person had a nonstop interaction connected Levi's sales. At Kohl's stores with a Sephora, helium said its income person grown "at a faster clip."
As of this vacation season, Kohl's had 600 Sephora shops wrong of its stores. It plans to adhd those shops to each of its much than 1,100 locations.
"We're already starting to spot the interaction of Sephora stores connected our women's concern successful Kohl's," helium said. "It's decidedly driving a caller new lawsuit there."
