Beyoncé and her beyhive can only do so much for Levi’s jeans

By Leticia Miranda

Levi Strauss & Co. jeans got a serious hat tip last week with the release of Beyoncé’s new album, Cowboy Carter, which draws on country and folk music across cultures and eras.

It includes a particularly sensual song called Levii’s Jeans. The double 'i' as many fans have speculated, plays off the fact that Cowboy Carter is “Act II” of a planned trilogy.

The company nodded to Beyoncé by changing its Instagram name to “Levii’s” and posting a carousel of photos with the subtitle “Oh to be Levi’s jeans right now”.

Already, there is speculation that a Cowboy Carter tour could be the type of windfall for the more than century-old jeans maker that Beyoncé’s Renaissance tour was for glitzy and glam Etsy Inc. businesses.

It’s like a glittering marketing campaign served up on a silver platter for Levi. But it’s the brand’s solid cost-cutting and growth plan that will keep it heading in the right direction, not the Beyhive alone.

Of course, being on the radar of one of the biggest fandoms in the world has its perks. It could help Levi thrive during this current stretch of slowing consumer demand for goods and kick off its campaign to become a more premium, sought-after brand.

Yet, on its earnings call Wednesday, the company indicated that it’s not getting too caught up in the Queen Bey hype. That’s wise. In the long run, it’ll take more than Beyoncé to get choosy shoppers to spend on jeans.

Although Levi’s new Chief Executive Officer Michelle Gass said that the company was “very honored” by the shoutout, she stopped short of saying the song impacted sales so far. “Denim is having a moment, and the Levi’s brand is having a powerful moment around the world,” she added.

The comments come months after the company launched a cost-cutting initiative. In January, it announced that it would trim about 12 per cent of its global workforce, discontinue its lower-margin Denizen business and reduce discounts.

Levi is also doubling down on getting shoppers to buy directly from them instead of department stores, and it is expanding its merchandise in an effort to become more of a denim lifestyle brand than just a jeans maker.

Achieving that particular aspiration will require more than cutting costs.

While an iconic denim wear brand, Levi still faces all the same challenges dogging the rest of the retail industry.

Executives from Etsy to Ulta Beauty have warned investors about a continued slowdown in consumer spending due to increased prices. Denim sales, more specifically, have been volatile over the last few years as shoppers switched out their skinny-leg jeans for wide legs.

After that stretch of growth, denim sales fell by an overall 6 per cent last year, according to Circana.

Credit: Bloomberg

Levi is also taking a risky move by betting on its brand name to get people to shop directly with them at full price rather than on sale at Macy’s Inc., for instance. While it sounds simple, that same strategy has marred even bigger names such as Nike Inc. In the sneaker maker’s case, leaving department stores and third-party retailers pushed some shoppers to choose a similar sneaker at a cheaper price than seek out the Nike brand in its own stores or online.

For Levi to avoid the same fate, consumers’ perceptions about denim have to shift. This is where Beyoncé may be the most helpful. The “Levii’s Jeans” lyrics help serve as fashion pointers for listeners: “Denim on denim on denim on denim, Give you high fashion in a simple white tee.” This all plays well into Levi’s vision for its future as a premium brand.

But it could lose market share if it doesn’t find the right direct and wholesale balance. Competition in denim wear is fierce.

While Levi’s still leads in the American denim department, Shein Group Ltd. is making inroads. Last week, the Singapore-based company announced it would be a fashion sponsor at Stagecoach: California's Country Music Festival for a third year. It released a partner collection of western-inspired music festival apparel, including fringe tops, bedazzled denim and metallic boots. A pair of $21 high waist fringed jeans seems like a better deal for a Cowboy Carter concert than a pair of Levi’s $98 501 jeans (the brand’s most well-known pair). History has also shown that Shein’s market operations, in particular, move as fast as the swipe of a finger while browsing TikTok. Shein may be more prepared for Cowboy Carter than Levi is so far.

Perhaps sensing the competition, Levi relies on fabric innovation and stays ahead of trends. For example, it recently released 511 Slim Tech Men’s Pants that are moisture-wicking and cooling and plans to launch new denim fabrics for warmer weather. And it’s investing more in baggier and looser silhouettes that are driving fashion trends and sales rather than skinny styles, says Kristen Classi-Zummo, an apparel industry analyst with Circana.

As Cowboy Carter challenges the limits of country music as a genre and the meaning of Americana, Levi is rethinking how denim fits into our wardrobes. In many ways, we’re witnessing two icons lean into the kind of American ingenuity and innovation that will keep their names on our lips years after this latest buzz.