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The Gap To Stop Selling Levi’s

July 30, 1991 GMT

SAN FRANCISCO (AP) _ The Gap Inc. said it will stop selling Levi’s at the end of the year to emphasize its own brands.

Levi Strauss & Co. products accounted for all The Gap’s blue jeans inventory when the chain of clothing stores began 21 years ago, but now have fallen to 2 percent of sales.

″We have continued over the years to build The Gap and Banana Republic labels such that we have increased name recognition,″ company treasurer Warren R. Hashagen said Monday. Those brands are now second in sales after Levi’s, he said.

The house label will eliminate the wholesale middleman, providing better value for customers and improving the company’s margins, Hashagen said.

While originally considered the place to buy jeans, The Gap is now better known for other no-frills clothing. Its stylish advertising seldom highlights jeans.

Both San Francisco-based companies agreed to part ways, Levi Strauss said.

″The Gap used to be one of our primary customers but they’re not nearly as big a piece of the business as they used to be,″ Levi Strauss spokesman John Onada said.

The change should not affect the privately held company’s sales, a record $4.2 billion in 1990, he said. Although the sale of denim jeans has slowed, Levi Strauss has enjoyed success with Dockers, a line of casual clothes for adults.

The Gap Inc., with more than 1,100 stores including The Gap, Banana Republic and GapKids, has weathered the consumer spending slump that has eaten away profits of other apparel companies. Profits for the quarter ending May 4 jumped 93 percent to $41 million on sales of $490 million.