Robert Haas: Jean Therapy

Faded denim? Levi Strauss, the San Francisco company that put the world into blue jeans, is feeling the pinch of competition. On Nov. 3, CEO Robert Haas announced that Levi's will shutter 11 of its 37 plants in the U.S. and Canada and lay off a third of the workforce. Demand for Levi's jeans is down, while competition from designer labels and store brands is up. "After a decade of unprecedented growth, we probably overextended the boundaries of our business," says Haas.

Haas is working to cultivate a hipper image. One change will be in ads. Besides hunting for a new agency, Levi's says it will double its $200 million-plus marketing budget--already one of the largest among jeans makers--over the next several years.

Also, Levi's will launch a new line next fall called Red Line that attempts to blend traditional style with contemporary tastes. "All good marketers have to continue to reinvent themselves," says Gordon Shank, president of Levi Strauss, The Americas. Too bad some 6,395 Levi's workers won't be part of that process.

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