The CEO of Levi’s Reveals His Strategy for Turnaround: Firing Executives and Changing the Culture

The CEO of Levi’s Reveals the Strategy Behind the Company’s Turnaround


In this article, we will explore the successful turnaround story of Levi’s, the world’s most famous denim jeans company. The CEO, Charles Bergh, shares his insights on transforming the company and overcoming challenges.

Firing Executives to Change the Culture

When Charles Bergh became the CEO of Levi’s in 2011, he recognized the need to change the company’s culture. He made the bold decision to fire more than half of his executives, believing that changing the people was the easiest way to change the culture. Within the first 18 months, nine out of his 11 direct reports were replaced. However, Bergh admits that his biggest regret was not letting go of the wrong people sooner.

Reviving a Lost Brand

Levi’s was facing a challenging time when Bergh took over. The brand had lost its way, and a whole generation of consumers no longer associated with Levi’s jeans. The company’s performance had been inconsistent for over a decade, with fluctuating revenues and profits. Bergh set out to restore the brand’s reputation and reconnect with consumers.

Bringing Levi’s Back into the Limelight

Through Bergh’s leadership, Levi’s experienced a remarkable turnaround. In 2017, the company achieved 8% annual revenue growth, the highest in a decade. This growth continued in 2018 with a 14% year-on-year revenue increase. Bergh attributes this success to his team and their collective effort to place the brand at the center of culture.

Challenges Ahead

While Levi’s has made significant progress, there are still challenges to overcome. The company recently revised its profit outlook for 2023 due to a decline in wholesale revenue and soft sales in the U.S. market. Levi’s had to adapt to changing consumer preferences, with a greater demand for comfortable and looser fit garments post-pandemic.

Expanding in Asia

Levi’s sees a promising growth opportunity in Asia, particularly in China. The company is opening larger stores and expects to benefit from revenge spending among Chinese customers. In the second quarter, revenue from Asia increased by 18%. However, Levi’s acknowledges that Asia currently accounts for less than 20% of total sales and China represents less than 3% of the company’s business. They aim to increase their presence in the region by opening about 100 new stores each year.

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