When Growth Stalls

by Matthew S. Olson, Derek van Bever, and Seth Verry

SENIOR MANAGEMENT AT LEVI STRAUSS & COMPANY could be forgiven for not seeing it coming. The year was 1996. The company had just achieved a personal best, with sales cresting $7 billion for the first time in its history. This performance extended a run of growth in which overall revenue had more than doubled within a decade. Since taking the company private in 1985, management had relaunched the flagship 501 brand, introduced the Dockers line of khaki pants, and increased international sales from 23% to 38% of revenue and more than 50% of profits. Growth in 1995 was the strongest it had been in recent years.

And then came the stall. From that high-water mark of 1996, company ...

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