Chip Bergh, Levi Strauss & Co's CEO, announced his departure in January to hand over his position to Michelle Grass, his appointed successor who left her position at Kohl's earlier this year. Bergh will remain an advisor until his retirement in late April of the fiscal year. Michelle Gass will officially become the CEO on January 29, marking the completion of a succession plan announced over a year ago.
Chip Bergh's Legacy
During Bergh's leadership, Levi Strauss transformed from a primarily U.S. men's wholesale pants business to a global, direct-to-consumer company. He also revitalized the women's industry, led the company through a successful IPO in 2019, and expanded the brand portfolio with the acquisition of Beyond Yoga in 2021.
Before joining Levi Strauss, Bergh held critical roles at Procter & Gamble for 21 years. Since becoming president of Levi's, Gass has overseen various aspects of the brand, including product, merchandising, marketing, e-commerce, and global operations. Her focus has been accelerating international growth and positioning the brand as a comprehensive denim lifestyle clothing business.
Bob Eckert, the chairman of Levi's board, expressed gratitude for Chip's inspiring leadership and steadfast dedication to the company over the past 12 years. Eckert acknowledged Chip's transformative impact on the company, making it better than when he started. He also expects ongoing benefits from Chip's strategic perspective as he continues to serve on the company's board.
Michelle Grass Steps Down at Kohl's
Levi Strauss & Co. CEO Chip Bergh revealed that pressure from activist investors led Kohl's CEO Michelle Gass to contemplate the position. On Tuesday, Levi disclosed that Gass would join as president in January and assume the role of chief executive within the next 18 months.
According to Bergh, speaking to CNBC, Michelle Gass has faced significant challenges. It's one of the reasons they reached out to her, even though she wasn't actively seeking a new role. The recent activist pressure, particularly with another letter in September, made the conditions suitable for her to consider. Kohl's board reached an agreement with investors, appointing three new directors, including former Burlington Stores CEO Tom Kingsbury. On Tuesday, Kohl's appointed Kingsbury as its interim CEO. Levi's shares closed at $14.86 on Tuesday, down approximately 3%. Meanwhile, Kohl's shares finished the day at $28.82, up about 7%.
Looking Ahead
As the leader at Levi, Gass will oversee the renowned denim brand's efforts to increase apparel sales directly to consumers via its stores and website. About 36% of total sales come from direct sales, and Levi plans to grow its direct-to-consumer business to represent 55% of total sales by 2027.
Levi's is expanding beyond its famous jeans to increase sales of tops and activewear. The company acquired Beyond Yoga last year and aims to almost double revenue from tops by 2027. Levi has profited from a trend toward casual clothing due to the pandemic and a new fashion cycle favoring looser-fitting denim over skinny jeans.
Bergh stated that Gass is well-prepared for the role, given her over two decades of retail experience. He has known her for around a decade and observed her building brands, initiating new projects, and guiding a retailer through the difficulties of the pandemic.
