As many outgoing chiefs do, Levi Strauss’ Charles (or Chip) Bergh has been reflecting on his time at the company—and there’s one thing during his 13-year stint at the helm that he wishes he’d done differently.
By his second day on the job, he told CNBC, he knew that the best way to turn around the stale company was to refresh its leadership team, and so within a year of running the world’s most famous jeans company, Bergh had fired more than half of his executives.
But don’t be fooled—his biggest regret isn’t the mass sacking of his peers. Actually, it’s not terminating the people soon enough when he knew there was “something not right”. Ultimately, Bergh revealed that the business lost some of its best leaders because he was too slow in acting on his gut instinct by getting ride of employees that needed to go and promoting other talented people.
“The easiest way to change the culture is to change the people. I had 11 direct reports, and in the first 18 months, nine of them were gone,” he said. “My biggest regret is that we didn’t lean into some of these great leaders, and we lost some because I held on to somebody longer than I should have.”
Despite losing some of the 170-year-old company’s top talent, Bergh still managed to turn around Levi’s dwindling sales and reputation.
Bergh’s turnaround job at Levi
When Bergh took on the top job at Levi in September 2011, the American clothing company was in a slump: The business was nearly $2 billion in debt and it was becoming increasingly irrelevant as young shoppers ditched the iconic brand for cooler new kids on the block like Gap and 7 for All Mankind.
Meanwhile, annual sales—which peaked at $7 billion in 1997—had fallen to around $4.1 billion in five years; from 2001 to 2010 they never exceeded $4.5 billion.
“The brand was really lost. We had a whole generation of consumers that didn’t grow up wearing Levi’s like I did when I was a kid,” Bergh said.
“The company’s performance had been really erratic for more than 10 years. One year the revenues would go up, but the profits would go down. The next year, they would fix the profits, but the revenues went down.”
Six years into the job, Bergh proved his value: In 2017, Levi recorded its highest sales growth in a decade, and its debt hit a record-low since the year 2000 at $444 million. And it wasn’t a fluke. The company experienced similar success in the following years, as between 2017 and 2019 it experienced an 18% increase in revenues and around 35% growth in earnings per share.
Even after a stock price bloodbath during the first year of the pandemic, Levi bounced back better than ever before with stock peaking at around $30 in 2021, up from around $17 in 2017.
“I am just the orchestra conductor and have built an amazing team around me,” Bergh commented.
Levi’s tough 2023
Today, Levi’s is in a very different position: This month, its stock price has hovered at around $13, and the company also severely cut its 2023 profit outlook after it reported a major decline in wholesale revenue and soft sales in the U.S., its largest market.
In this dip, Levi is having another leadership shakeup: Enter, Michelle Gass, the former chief executive of U.S. department store chain Kohl’s who is set to replace Chip Bergh.
Although Glass joined the company this January, she won’t formally take on the top role until May 2024—giving her plenty of time to shadow her predecessor. But her appointment hasn’t been without controversy. As previously reported in Fortune, Glass was unable to turn Khol’s around.
Time will tell whether she can return Levi to its former glory.