Is Target and Levi’s expanding partnership a win-win?

Discussion
Frankies Bikinis founder and creative director Francesca Aiello - Photo: Frankies Bikinis
Mar 29, 2022

Target plans to expand the availability of its selection of Levi’s premium Red Tab jeans from 500 stores to 800 this spring in a bid to amplify its “status as your favorite denim destination.”

The retailer’s relationship with Levi’s began in 2011 with the introduction of the Denizen value-jean, now in nearly 1,500 of its 2,000 stores. In 2019, Target introduced Levi’s Red Tab 501, 505 and 511 styles to 50 stores near college campuses and urban centers and has expanded over the several seasons to reach 500 last fall. Prices on the Red Tab range from $59.99 to $69.99.

The latest expansion brings Target’s Levi’s offering to more than 180 pieces, including tops, dresses, jeans and jackets.

On its fourth-quarter analyst call in early March, Christina Hennington, Target’s EVP and chief growth officer, said the discounter’s expanding Levi’s partnership, along with the recent introduction of private labels Universal Thread and Goodfellow, is “bringing us from a retailer that sold denim to a denim destination, having grown sales in this category by more than $150 million since 2019.”

Target also counts its frequent designer collaborations as well as Disney, Apple and Ulta Beauty in-store shops as key traffic drivers.

For Levi’s, the move continues the shift from its department store roots. Budget-priced Levi’s jeans first arrived at Walmart in 2002. Levi’s also has a goal to expand direct-to-consumer to 60 percent of revenues by 2030, from nearly 40 percent in 2020 and 20 percent in 2011.

Many other stores also claim to be denim destinations, including Kohl’s, American Eagle, Guess and Madewell over the past year.

The jeans category made a strong comeback during the pandemic. On its fourth-quarter conference call in January, Levi’s CEO Chip Bergh said the category has benefited from the continued acceleration of the casualization trend, expanding waist sizes over the pandemic that prompt wardrobe updates and a new denim cycle led by looser, baggier fits.

Said Mr. Bergh, “The last big cycle was skinny jeans, which is a women’s only thing, and the new denim cycle drives apparel widely, it drives footwear, it drives tops as well. So I’m optimistic for that reason.”

DISCUSSION QUESTIONS: Would capturing a reputation as a go-to place for denim be a huge competitive win for Target? Does Levi’s lose any brand equity with its further expansion at Target and other discounters?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Denim is an American mainstay and certainly will add another reason for destination shopping."
"Levi’s isn’t an “exclusive” brand, it’s iconic because it’s so inclusive. And it’s a great fit for the Target shopper."
"Have you seen a five-year graphic on Target’s revenue? Whatever Cornell’s making, it’s not enough..."

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18 Comments on "Is Target and Levi’s expanding partnership a win-win?"


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Liza Amlani
BrainTrust

Any partnership with Target is a win. Denim is a wardrobe staple so scaling Levi’s to more doors will drive footfall. Levi’s doesn’t lose brand equity because their loyal Levi’s retail customer is not necessarily shopping a suburban Target store. Although the Target shopper may venture into an urban city, know the brand from their local store and seek out the Levi’s retail experience because they were exposed to the brand. What I would have loved to see is a limited edition collaboration with Levi’s.

David Naumann
BrainTrust

The expanded availability of Target’s selection of Levi’s premium Red Tab jeans will be good for both Levi’s and Target. Loyal Levi’s customers will increase store visits at Target and should increase sales for both companies. I agree with Liza’s suggestion that a Levi’s limited edition would be a smart strategy to make the Target offering more unique and exclusive.

Lucille DeHart
BrainTrust

Levi’s is one of the few brands that is truly elastic. They can sell from prestige to discount and their brand remains authentic. Timex, Nike are also among the legacy brands that are insulated from dilution based on channel. I think this is a win-win. J.C. Penney tried to create a Levi’s shop within their reinvention stage and it would have been a solid merchandising move; Target will be able to execute this much better. Denim is an American mainstay and certainly will add another reason for destination shopping.

Brian Delp
BrainTrust
4 months 10 days ago

Absolutely. This fits the right demographic for Target as well. Levi’s is pretty well distributed already, and the Target customer tends to be more affluent and brand conscious so this seems like a win-win. I don’t think Levi’s alone will fully cement Target as the denim destination, but it’s a great feather in their cap.

Bob Amster
BrainTrust

If any company was believed to be the “go-to” place for denim, it would be a huge competitive win for them. That status would not last long. Competitors would be all over that space seeking their slice of the pie.

Rich Kizer
BrainTrust

Over the years, Levi has established its position as top-of-mind in consumers’ brains when they think jeans and, more importantly, denim. So now Target attaches itself to that mind placement. How can that not be very valuable for both companies?

Georganne Bender
BrainTrust

Jeans, Including Levi’s, are a commodity that can be found everywhere, so is any place really a denim destination? Of course any partnership with Target is going to be good for the partner, so why not?

Ryan Mathews
BrainTrust

Georganne, speaking of denim and destination, some BrainTrusters may remember the “great deal” Kmart did with Gitano. The result for those unfamiliar with the deal was that a mid-tier quasi-fashion brand got slaughtered and Kmart wasn’t saved. This isn’t going to happen to Levi’s — at least in all probability — but I’m not sure this is such a huge deal for either side. As you said, it is a commodity category, at least on the lower end of the price scale.

Georganne Bender
BrainTrust

I remember Gitano! I also remember when The Gap was all about Levi’s and truly dominated the jean field.

Jeff Sward
BrainTrust

There is a Red Tab offering in my local Target. Amherst, MA is surrounded by at least five colleges and universities so I see the connection with that part of the equation. The offering was modest from a fit and wash perspective. Not what I would call dominant, but does it really have to be? Menswear at this Target does not have a huge footprint, so I think they are probably experimenting with servicing three buckets of product. Casual, active and denim. Now it’s a question of how they balance that portfolio. And within denim, Red Tab strikes me as expensive for Target, so it becomes a function of how they layer and assort the whole denim category. And no, Levi loses no brand equity at Target. Neither does Apple or Disney or …

David Spear
BrainTrust

This is clear win-win for both. Target grows its base and Levi’s attracts a Target consumer that has a little more disposable income, both benefiting in meaningful ways for their businesses. And Levi’s does NOT lose an ounce of brand equity. If anything, I think they gain a point.

Lee Peterson
BrainTrust

Have you seen a five-year graphic on Target’s revenue? Whatever Cornell’s making, it’s not enough (and I would normally never say that about a CEO today). This Levi’s deal is huge. That chart is going to look even better next year.

Carol Spieckerman
BrainTrust

Levi’s has done a great job building out a good/better/best portfolio that expands its distribution without conflict. Denim is an evergreen business and Levi’s is smart to grow by expanding on the core rather than stretching the limits through distracting category extensions.

Gary Sankary
BrainTrust

Target does a masterful job selecting the right partners that compliment their brand and their partners’ brand. I don’t expect any issues with Levi’s brand equity from their relationship with Target. Most consumers think of Target as something a bit different than a “discounter.” Given the hot trend in the denim category, and the commonalities in customer profile between Target and Levi’s, I have no doubt this will be a hit.

Dick Seesel
BrainTrust

It’s a win for Target, obviously, but it’s also an important move for Levi’s to place its signature products in the best mid-tier retailer in America. (And yes, Target has really emerged as a middle-market brand instead of a traditional discounter.) For years, Levi’s sold its Red Tab product to JCPenney and Kohl’s, with a much-reduced presence in traditional department stores compared to years past. With the reduced footprint in those stores, and the reduction in JCP business, it’s critical for Levi’s to go where its customers are already shopping — Target.

Nicola Kinsella
BrainTrust

Great move by Target. Another example of how strategic partnerships in specific categories are helping them differentiate from competitors. They’ve got great traction with Harry’s shave brand, Apple, and Ulta Beauty. Watch for this trend to continue.

As for Levi’s I don’t think this devalues them at all. If anything it makes them more accessible, particularly as you move further away from cities. Levi’s isn’t an “exclusive” brand, it’s iconic because it’s so inclusive. And it’s a great fit for the Target shopper.

Brandon Rael
BrainTrust

This is a clear win-win scenario for both Levi’s and Target. Collaborations and these sorts of partnerships have worked quite well for Target. Additionally, the additional exposure for Levi’s, without the significant investments in brick and mortar locations, is a vital driver of this partnership.

Although the casual and yoga pants trends have taken over, denim is an eternal trend and has proven to be a sustainable model for well over 100 years. Levi’s has been continuously reinventing their brand and value proposition. A partnership with Target is yet another aspect of its evolution as an iconic brand.

Carlos Arambula
BrainTrust

It is a competitive win for Target and Levi’s. Even if the “department store jean” brand equity decreases for Levi’s, the brand benefits from the increased number of eyes and available shopping destinations.

It’s a competitive category, and a venerable brand that already owns space in the consumer’s mind, needs to remind consumers it has always been there for them.

wpDiscuz
Braintrust
"Denim is an American mainstay and certainly will add another reason for destination shopping."
"Levi’s isn’t an “exclusive” brand, it’s iconic because it’s so inclusive. And it’s a great fit for the Target shopper."
"Have you seen a five-year graphic on Target’s revenue? Whatever Cornell’s making, it’s not enough..."

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