Levi’s plans to double in size, bets on casual fashion | Business

Despite macroeconomic headwinds, Levi’s expects its revenue in Brazil to rise 18% this year. “Consumers are more eager this year, we were positively surprised,” Francisco Alves, managing director for Brazil, Argentina, and Uruguay, told Valor. The company, which had 80 stores in Brazil in 2021, expects to end 2025 with 100 locations; one-third owned, the rest franchised.

In the second quarter of this year, Levi’s reported net revenue of $1.4 billion (R$7.8 billion), a 6% year-over-year increase. Revenue in the Americas rose 5% to $748 million (R$4.1 billion). While the company does not disclose country-level data, it confirms that Brazil ranks among its ten largest markets globally, and that Latin America has been the company’s fastest-growing region over the past three years.

Mr. Alves attributes this momentum to structural changes launched in 2015. One of the most significant was a complete overhaul of franchise contracts, which now include stricter conditions and expectations more closely aligned with global standards. “Before, negotiations were focused purely on price. Now, we require modern stores, high service quality, and the use of omnichannel tools that integrate physical and digital sales.”

The company also restructured its multibrand distribution strategy, prioritizing the most effective retail and e-commerce partners. “Instead of being in 2,500 points of sale like we were in 2021, we now sell 40% more with just 1,300,” the executive pointed out.

The digital channel is playing an increasingly important role in Levi’s strategy. Online sales now account for 10% of the company’s Brazilian business, up from just 3% a few years ago. Of those digital sales, 80% come through the company’s website, with the remainder through marketplaces such as Amazon and Mercado Livre.

Operational tweaks aside, one of Levi’s main levers for doubling its size over the next five years is expanding how the brand is perceived. The goal is to move beyond being just a denim label and become known for a broader lifestyle offering. This transformation is underway through a diversification of its product line to include more casual apparel. Mr. Alves acknowledges the challenge, but says the shift is gaining traction.

Today, jeanswear—including pants, shirts, and jackets—accounts for 60% of Levi’s revenue in Brazil, down from 80% in earlier years. “We want that a customer who is thinking about buying a dress also consider checking Levi’s,” Mr. Alves noted. Dresses, in fact, were the brand’s top-selling item in the first half of the year.

Another major challenge for Levi’s is strengthening its connection with younger generations without alienating its longtime customers. “Every time we refresh the collection, older customers say, ‘Hey, you’re not getting rid of my 505s, are you?’” Mr. Alves said. While the brand’s transition has had its hits and misses, he believes it’s moving in the right direction. “We’ll be taking some risks in the next collection. The fifty-somethings might grumble a bit, but it’s been working well.”

What’s unlikely to change is Levi’s premium positioning. In Brazil, the average price of a pair of Levi’s jeans ranges from R$399 to R$429. According to the executive, that placement wasn’t intentional, but stems from the company’s commitment to quality, social responsibility, and specific production standards. “As a result, we naturally end up catering to a more limited audience.”

This positioning has also shielded the brand from the wave of low-cost fashion imports that have surged in recent years. “Brands competing in lower price brackets are definitely feeling the squeeze, but it’s not a big concern for us. It hasn’t affected us much,” Mr. Alves noted. The brand has also remained resilient in the face of slowing consumer demand amid high interest rates and persistent inflation.

As Valor previously reported, while companies have been passing more price increases on to middle- and upper-income consumers, lower-income households have seen the greatest budget pressure in Brazil so far in 2025. The Brazilian Textile and Apparel Industry Association (ABIT) is projecting 2.6% growth for the sector this year, in line with GDP expectations.

Currently, 45% to 50% of Levi’s products sold in Brazil are made locally through partners, with the remainder imported. Despite this exposure to global trade, Mr. Alves downplayed the potential impact of U.S. tariffs announced by President Trump. “We’re not happy with international trade barriers that complicate supply chain optimization, but it hasn’t been a major concern, as most of our purchases were already locked in,” he said. Looking ahead, the company plans to hedge against potential shifts in trade routes by placing orders earlier and maintaining a diversified supplier base.