Asia will be the backbone of global denim wear brand Levi & Strauss growth in the short and long term according to its CEO.
Despite the slowing economic growth in the region, driven by China’s marked slowdown, Levi CEO and global president Chip Bergh says his company remains upbeat about consumer spending regionally.
“We are very optimistic,” Bergh told Channel News Asia in an interview, (you can read the full text and watch the video here).
“Despite the reported (growth) slowdown in markets like China, this is still going to be our fastest growing region, both short- and long-term.”
He says the main driver will be the rapidly growing ranks of young Chinese consumers joining the middle class, who have strong emotional attachments to brands and who are eager to buy branded goods.
“The demographics work to our advantage and we are strategically focused on Asia as a result of that,” Bergh told Channel News Asia.
The soaring value of the US currency has impacted on Levi & Strauss margins in the region – and its reported earnings in its home currency. As a result the company had adjusted product prices in some markets “to protect the long-term structural economics of our business”.
“At the same time, we are also working on the cost side of the equation to protect our growth margins and so we’ve been able to continue to grow and grow profitably,” said Bergh.
In the third quarter of 2015, Levi’s reported a 15 per cent jump in earnings to US$58.2 million, thanks to double-digit growth in its women’s apparel collection and continued strength of the international retail business, including Levi Asia.