October 29, 1999
Levi Strauss to Stop Web Sales
By THE ASSOCIATED PRESS
AN FRANCISCO -- Levi Strauss & Co. will stop selling its products online through its own Web sites, just a year after the struggling jeans maker launched its Internet business.
The announcement, which was made Friday, is the latest trouble plaguing Levi's, which has struggled in recent years with sagging sales and has looked for new outlets to promote its goods.
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After Christmas, Levi's clothing and accessories -- such as jeans, khakis, hats and belts -- will be sold only on Web sites operated by J.C. Penney and Macy's, two of Levi's biggest customers.
Levi's spokesman Jeff Beckman said Levi's may continue selling limited edition or other special products on its site.
Levi's said that sales at www.levi.com and www.dockers.com have been strong, but costs remain high.
``Right now the cost of running a world-class e-commerce business is unaffordable considering our competing priorities,' Beckman said.
Levi's has watched its sales decline in recent years as teen-agers began shunning its classic five-pocket blue jeans for trendier styles by rival designers. After a peak of $7.1 billion in 1996, sales dropped to $6.9 billion in 1997 and to $6 billion last year.
A year ago, Levi's launched its online stores, saying they were an easy way to learn more about its consumers and keep in touch with their ever-changing desires. But the move angered the company's key retail partners, who were forbidden from selling Levi's and Dockers over the Web.
Levi's isn't alone. Many manufacturers are struggling with how to handle the Internet -- whether to exclusively sell merchandise themselves or allow retailers to offer their brands online.
Just last week, Nike announced it would take orders for customized shoes online and deliver them directly to homes, bypassing retailers.
Lisa Allen, an analyst at Forrester Research Inc. in Cambridge, Mass. said Levi's is setting a trend in the wrong direction by giving in to retailers and backing away from the Web.
``It's an opportunity to broaden their distribution channels,' she said. ``There are ways to assuage the concerns of retailers.'
Still, the costs of operating an online store can be high, especially for manufacturers who aren't used to dealing with issues like customer service.
``E-commerce can be a tremendous distraction to your core business,' said Candace Corlett of New York-based WSL Strategic Retail. ``It was a very precipitous move on the part of a weak company to try to take on their retailers.' |
