Levi Strauss is planning to abandon its commercial place in cyberspace and leave selling its clothing online to retailers like JC Penney and Macys.com.
A company spokesman confirmed published reports that Levi would quit direct sales on the Web shortly after Christmas and move its online retail efforts to third parties.
The $US6 billion retailer, which has seen its revenues slide since 1996, has failed to generate the sales to offset the costs necessary to maintain the online presence insiders felt necessary.
Ironically, the company had recently invested close to $1 million in Blue Martini Software's E-Merchandising software, according to a source. Company spokesperson Jeff Beckman said he did not what the fate of the product would be at Levis.
John Jordan, director of electric-commerce research at the Ernst & Young Center for Business Innovation, said that given Levi's past financial problems, pulling back from its e-commerce strategy and retrenching may be a smart move for the company.
"The cultural challenge of running an online business is formidable, and many incumbent businesses, especially in times of turmoil, are going to retrench and pull back," he said.
Jordan noted that even companies such as the Gap, which is often held up as a successful e-commerce business, is also having the same problems with low clothing sales that have plagued Levi.
"The fact remains that fewer people are buying their clothes. And they can't stop doing basic business that you need to be a success. Doing e-business does not solve the problem of people not wearing your pants whether it's the Gap or Levis," said Jordan. "You have to solve the market problem before you solve the channel problem."
Last year, industry watchers reported, Levi Strauss had asked some major retailers like Macys.com not to sell its goods online, although those same companies were selling Levi clothing in their brick-and-mortar stores.