Levi’s banks on ‘North Star’ of Asia to drive growth

Premiumisation has allowed its Japan unit to post the fastest growth in the region.

Levi Strauss & Co. seeks to elevate its brand in Asia using Japan as a model for store format, product design, and consumer engagement as it builds on its image as a maker of premium and lifestyle denim jeans.

Japan is the company’s “North Star” in Asia, Nuholt Huisamen, managing director and senior vice president for the Asia-Pacific region at Levi Strauss, told Retail Asia in an interview. “A lot of the other markets look to Japan for inspiration.”

He said the group’s premiumisation strategy - focused on educating consumers on the quality and craftsmanship of Japanese denim and why it’s worth paying more for it - in Japan allowed their business there to post the fastest growth in Asia after a global COVID-19 pandemic.

On an adjusted basis, Levi’s globally earned a profit of 38 cents per share in the first quarter ended March 2, according to financial results posted on its website, 52% higher than a year earlier and better than analysts’ forecast of 28 cents.

In Asia, operating income rose 19% to $58m from a year earlier, whilst net revenue increased 7% to $308m.

“In particular, the craftsmanship—like our Blue Tab range, inspired by denim craftsmanship made in Japan—has resonated strongly in other Asian markets,” Huisamen said. “In China, it’s one of our highest contributing segments, and we’re seeing similar demand in Southeast Asia.”

The company’s new 5,380 square-foot store in Nagoya, its biggest single-storey shop in the region excluding India, seeks to mirror the success of flagship stores in Harajuku and Shinjuku.

The store includes Levi’s Tailor Shop, which lets customers customise denim with patches or embroidery.

The brand also uses a digital styling platform called Staff Start, where store associates post outfits online that customers can browse before visiting.

“People really want to get out and shop, but the expectation is more than just for a product—it’s for experience,” David Hamaty, general manager for North Asia at Levi Strauss, said in the same interview. “It’s everything from customer service to store environment and a deeper connection to the brand.”

“What we’ve seen is customers becoming more like fans. They recognise the staff and come with specific styling questions,” he added.

The focus on personalisation has influenced Levi’s approach across the region. In markets like Singapore, Thailand, and Indonesia, the average store size was doubled to accommodate more products.

“We’ve been following this example from Japan by enlarging a lot of our stores,” Huisamen said.

Levi’s also uses tech to improve efficiency and customer experience. Its stores in Japan use digital screens for storytelling and a loyalty programme to personalise product recommendation.

“We use technology to create a seamless experience online and offline,” Hamaty said. “Japanese consumers are knowledgeable about Levi’s heritage—from orange tabs to silver tabs—so we bring those stories to life in-store.”

Levi’s is optimistic despite inflation and Japan’s ageing population.

“GDP (gross domestic product) isn’t growing fast and people are cautious about spending,” Hamaty said. “But in these times, consumers look for authentic, trusted brands with heritage.”

Levi’s is also sponsoring cultural events such as the Fuji Rock Festival and the Seoul Jazz Festival.

“We're always looking for the next good locations, but we also want to expand brand awareness through cultural moments,” Hamaty said. “When it comes to growth and navigating headwinds, we focus on what we can control. Japan is performing exceptionally well.”