Levi Strauss (LEVI) hopes a Beyoncé marketing campaign can upgrade brand growth.
The denim manufacturer announced its partnership with the music megastar, whose most recent "Cowboy Carter" album featured a song called "Levii's Jeans," just before reporting third quarter earnings results.
"We are honored that we are partnering with a global icon like Beyoncé, ... somebody who stands for empowering women and somebody whose values align with ours," Levi Strauss & Co. CFO Harmit Singh told Yahoo Finance on Thursday. "And so, our view is ... this is a win-win for both Beyoncé as well as us."
Levi Strauss stock moved 8% higher in the week after it teased the brand partnership with the all-time leading Grammy winner on Sept. 23. But shares of Levi's dropped 7.6% in the trading session following its third quarter earnings report after the company dampened investor expectations for fourth quarter revenue and said it was looking to offload its struggling Docker's pants business.
Beyoncé partnership 'reinforces our focus' on women's apparel
Levi's leadership hopes a new Beyoncé commercial will drive consumer appeal, especially for its women's business, which grew by 11% during the third quarter and currently represents just over one-third of Levi's current business.
"Our view is that this partnership reinforces our focus on women's [business]," Singh said. "Our women's business is having a solid year again, so I think this [partnership] continues to fuel that momentum."
As part of the campaign, Beyoncé posted a series of photos and videos on Instagram that showed the artist and cultural icon wearing jeans and a denim 10-gallon hat at a laundromat. The accompanying captions read, "Give you these Blues, it's in my Genes" and "Give you high fashion with a simple white tee."
The company also said it hopes to expand from being a mainly denim bottoms brand to a "head-to-toe denim lifestyle brand," as CEO Michelle Gass described during the Q3 earnings call.
Levi's has accelerated its efforts to lean further into the product pipeline for denim, yoga, and tops.
"We want to get this [tops] business to be much higher," Singh said. "We sell right now, I think, three bottoms to a top."
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