Levi’s Re-evaluates discount tactics

I worried about Levi's move before, and now it looks like discounting might not be the best thing for them.

Levi Strauss' move into the discount channels may have stimulated even more difficulties for the jeansmaker, which announced on the day of Mr. Marineau's memo that sales will decline for the seventh straight year from its 1996 high of $7.1 billion to an expected $4 billion come January.

Burt Flickinger, managing director of Strategic Resources Group/Flickinger Consulting, New York, said the arrival of Levi Strauss Signature stimulated something of a denim price war in the giant discounter's apparel department.

"The competing denim manufacturers are getting very aggressive in promoting against Levi Strauss Signature," he said.

If you can avoid it, discounting is not the way to go in business. People always pay a premium for high quality things, and while expanding with sales with a discount line may appear to boost overall profits, you have to consider what it may do to your primary brand long-term.

Via Lead and Gold.