RETAILING FINAL EXAM

Mahnoor Amjad 17345

Q.1 What are the pros and cons of Levi’s potential partnership with Walmart? Please list them
and then take a decision. Please give your rationale for the decision.
(20 marks)

Competition hit Levis from both high and low ends. Due to increased competition Levis was
losings its sale. The image conscious people had competitors like Talph Polo, Tomy Hilfiger, on
the other hand the fashion forwards designs, fabrics and fits were available at Guess, Diesel etc.
While on the lower end, Target and Walmart were offering private labeled jeans under $20.
It was getting difficult for Levis to compete with its competitors as well as stick to its brand
image.

PROS

Walmart is a pioneer in supply chain management systems, offer products to customers at the
lowest possible prices, while at the same time assuring that products the customers demanded
were always on store shelves. Walmart wants big-name brands to lure more affluent customers
into its stores, while still maintaining the low price points all Walmart customers have come to
expect.
Looking at the strengths of Levis Co, it shows that it could have a bright future after the
potential partnership with Walmart. Being number 1 for apparel brand for brand recognition
and brand awareness, global presence, various variety and assortments, longstanding
relationships with many retailers: enabling it to work across several channel of distribution,
continued success of some brands like dockers. All these plus points would make this
partnership effective for both Levis as well as Walmart.
Walmart being the world’s largest retail chain and the largest clothing retailer could help Levi’s
increase its annual volume sales to hundreds of millions. The clients of the company are people
with different income levels and different lifestyles and as we have seen Levis offer different
variety for different target market. Each of its product line had a different target consumer, the
higher end brands were aimed at trend conscious buyers in the 15–24-year-old range where
Levis’s Red Tab line had jeans suitable for more than 10 to 12 different body shapes and styles
that included straight leg, relaxed, baggy, boot cut and slim. The company used the
combination of fit, fabric and finish as key differentiators for its target consumer and price
points.

Selling a Levi’s value brand to mass retailer such as Walmart, a retail channel that accounts for
almost 31% of all jeans sales. Analyzing the current situation, the potential increase in sales
sales from this new channel Walmart would probably be very good but perhaps only in the
short term.
The risk is that entering into the discount market even with a brand image of Levi’s that’s
differentiated from the main product line, will further dilute and devalue the brand, making it
even more unattractive to its current retailers.

CONS
Faced with a 5-year declines in sales, partnering with a new channel such as Walmart would not
be that successful.
Firstly, History of Levi’s 1994 Canadian dispute with Walmart may be a barrier to rekindling a
relationship with the mass retailer.
secondly, after this partnership with Walmart, if Levi’s gets dropped from the departmental
stores, Chain and independent stores because its brand would no longer be relevant to its
customers, then this potential loss could offset a good deal of any potential gain.
Furthermore, once if a brand loses its charm or image through dilution, discounting and
devaluation, even the benefits of Walmart carrying a higher profile brand would be lost too.
Introducing a value brand like Levi’s at Walmart seems like sacrificing a long-term growth for
short term revenue gain; since the devaluation of the brand through its association with
discounted retailer would likely cause department stores ad chains to drop the brand one by
one. Once the brand has no life beyond the discounter, its value is going to go down and is
more likely to command even lower price and less sakes even at the mass level.
even if Levi’s creates a new brand to channel through Walmart, it will likely use its tag
somewhere, but it would quickly destroy any relevance that the brand has for fashion conscious
shoppers and signify the beginning of the end of this iconic brand.

Looking at the cons of Levi’s partnership with Walmart, I think Levi should not partner with
Walmart. Instead of extending the brand to the point of complete dilution, Levi’s should focus
on its brand personality and marketing mix to make it a fresh and relevant brand that resonates
with the trendsetters. Furthermore, it should focus on product innovation, quality and value
rather than simply trying a new channel for a distressed brand.

Q.2 Are there any local or foreign clothing brands which sell in outlets other than their own? If
so, please give examples and elaborate on them.

(5 marks)

There are different clothing brands which sells in their own outlets as well as others too. Some
of these examples are listed below:
Calvin Klein:
Distributed over 110 countries, its apparel is available at different outlets too like Walmart,
Costco and Amazon.
Tommy Hilfiger
It's an American premium clothing brand which has 1400 stores in around 90 countries and is
also available at other different outlets like Costco Walmart and amazon.

HNM
Hnm is a Swedish multinational clothing-retail company, operates in 74 countries with over
5,000 stores under the various company brands is also available at Amazon, Walmart and
target.
ZARA
Is a Spanish apparel retailer, one of the biggest apparel retailers is available at Amazon,
Walmart other than having its own outlets.

Marks and Spencer's

Is major British multinational retailer with headquarters in London, England, that specializes in
selling clothing is also available at Amazon and Walmart.