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Beyoncé is in and casual khaki brand Dockers is out at Levi Strauss & Co.
Just days after Levi’s linked with Beyoncé — who is helping the denim mainstay reinterpret and modernize some of its classic ads with an eye toward growing its women’s business — the company said it’s looking to sell the ailing Dockers brand.
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The news came against the backdrop of weaker-than-expected third-quarter sales gains, where Dockers proved to be a significant drag, and earnings that nudged past analysts’ projections.
“We feel good about the underlying fundamentals of the business,” said Michelle Gass, president and chief executive officer of the company, in an interview with WWD. “They’re getting stronger and clearly our profitability is improving.
“We feel confident headed into the fourth quarter and into 2025,” Gass said. “For me, the headline is our strategy is working, being at the center of culture [with] the likes of Beyoncé and others, our women’s business is working, denim lifestyle, the strength of our U.S. market.”
But the Dockers business is not working as well as it once did.
Levi’s created Dockers as a khaki brand in 1986 as a way to diversify and build away from its denim base. The brand tried to up its fashion quotient over the years, but never fully broke with its image as a pant for dads.
The company sought a buyer for Dockers in 2004 when it was looking to pay down debt, but a final deal never happened. And sources said the brand was close once more to being sold in 2021.
Now, the company has retained Bank of America to formerly review the brand’s strategic options. While there is no set deadline, Harmit Singh, chief financial and growth officer, said the intent was to sell Dockers.
“Sometimes focus is important,” Singh said. “And with Michelle coming in [as CEO in January], we have really focused on amplifying. We talked about women’s and Beyond Yoga and this year we announced the exit of our footwear business. We announced that we were getting out of Denizen and now the big one with Dockers, and this is really about amplifying the focus on Levi’s.
“Strategically, our view is that the exit of Dockers will improve the margin structure of the company and top line growth,” he said.
Right now, the brand is a drag on the business.
Levi’s fiscal third-quarter net income increased 116 percent to $20.7 million, or 5 cents a diluted share, from $9.6 million, or 2 cents, a year earlier.