COVID-19 business update

A Global Progress Report from Chip Bergh

Chip Bergh, President & CEO
Levi Strauss & Co.
May 14, 2020

The following abridged message was originally shared with employees today from our President and CEO, Chip Bergh.

As we start to emerge from the coronavirus restrictions around the world, we are applying every lesson we’ve learned in recent months to reopen stores and refashion our business to meet the moment. We owe our colleagues in China and other parts of Asia a heavy debt; they’ve been going through this process first, tracking what’s working and what isn’t, and learning how consumer habits and sentiments are shifting. Their insights have been invaluable, and I want to share my deepest admiration and gratitude for the collaboration I’m seeing across the company.

While most of our stores are still closed, we are seeing signs of recovery every day. Today, all of our stores in China are open, including franchise doors. In Europe, nearly 250 stores are open now, and we expect more to open soon across [Europe] and [Asia]. Canada and [Latin America] have each opened doors, and in the U.S., we plan to open a handful of doors later this week, with more to follow as conditions and applicable regulations allow.

Our experience in these diverse markets around the world is allowing us to develop playbooks for reopening stores, tailored to specific regions. As Marc [Rosen] shared, we’re keeping the health and safety of our employees at the forefront of every decision. We are following carefully thought out criteria in deciding where and when to reopen, and then taking comprehensive precautions such as:

? Introducing deep-cleaning practices and providing hand sanitizer, face masks and gloves, along with sneeze guards at point-of-sale locations.
? Developing new ways to sanitize our sales floors, fitting rooms and back offices.
? Maintaining social distancing practices in stores and quarantining product after it has been tried on or after it has been returned, even if it was never worn.

For our store employees, I’m especially proud that we’ll be offering paid sick leave to part-time employees in the U.S. where it wasn’t previously available, providing our U.S. employees with a level of benefits similar to those provided in most other markets around the world (full-time staff were already eligible for LS&Co. benefits, including paid sick leave). This new policy reflects our commitment to protecting our people and building a stronger, more resilient team for the future. As Marc noted, we see this new policy as an investment in the future of our business and we hope to see other companies join us in extending sick leave to more workers.

As we reopen, we will be bringing back many furloughed employees. We’re already seeing promising results in Europe and Asia, where consumers are eager to reclaim at least a little bit of “normal.” That said, it won’t be “business as usual.” Shopping and buying behaviors will be different, and the full impact on retail is still a big unknown. It will be on us to continue to evolve to meet consumers where they are, while continuing to deliver products that are stylish, built to last, and sustainably made.

In addition to the safety precautions, we realize that consumer attitudes about shopping in store are changing. That’s why we’re accelerating our efforts to become a leading, world-class omnichannel retailer. We have introduced order online with pickup outside the store (whether that’s curbside in the U.S. or in line in Europe). We are shipping from store – in fact, approximately one-third of our U.S. ecommerce orders last week were fulfilled from a store. The Levi’s? app is taking off in the U.S. We now have more than 100,000 downloads of the U.S. app, following the success of our wildly popular loyalty app in Europe. We’ve set up store managers as virtual stylists in all three regions. In addition, we are enhancing social commerce, offering contactless payment, developing options for shopping by appointment and same-day delivery in markets where applicable.

We also are working with suppliers to make non-medical masks for our people to ensure that our retail and distribution center employees have the protective equipment they need to do their jobs as safely as possible. We also will soon start selling affordable, reversible and reusable masks. As this new offering grows for us, we’re donating $75,000 to Doctors Without Borders (on top of an earlier $150,000 donation from the Levi Strauss Foundation) to help them get the personal protective equipment they need to carry out the lifesaving emergency response work they do worldwide, including in many countries we source from.

Navigating this crisis and adapting to our new reality – that’s our greatest challenge, and it will be the one of the greatest tests of our careers. Because of all of you, I have every confidence in our ability to weather this situation.