My biggest fault: Retaining unfit employees for too long.

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The CEO of Levi’s Strauss, Charles Bergh, revealed that he knew firing executives was crucial to turn around the struggling denim jeans company. Upon joining in 2011, Bergh recognized that the brand had lost its way and was not resonating with the younger generation of consumers. Over the next 18 months, he fired nine out of his 11 direct reports in an effort to change the company’s culture. However, Bergh admitted that his biggest regret was not letting go of underperforming employees sooner.

Despite initial challenges, Levi’s experienced a remarkable revival under Bergh’s leadership. The company achieved 8% annual revenue growth in 2017, the highest in a decade, and continued to grow with a 14% year-on-year revenue increase in 2018. Bergh attributed this success to shaking the company out of complacency and assembling a strong team. However, Levi’s recently faced setbacks, with a decline in wholesale revenue and soft sales in the US, prompting a severe cut in their 2023 profit outlook. They now expect sales to grow between 1.5% to 2.5% this year compared to the previous range of 1.5% to 3%.

Levi’s is also focusing on expanding its presence in Asia, particularly China, as the region holds promising opportunities for growth. While Asia currently accounts for less than 20% of the company’s total sales and China represents less than 3% of its business, Bergh sees significant potential. The company plans to open larger stores and capitalize on the trend of “revenge spending” among Chinese customers. Levi’s aims to add approximately 100 stores globally each year, with one-third of them located in Asia. By expanding its footprint in the region, Levi’s hopes to catch up with competitors like Nike, who have a larger market share in China.

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