Tesco takes on Levi's in battle for bottom of the market

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The Independent Online
It could have been a scene from a stylised Levi's ad. High noon, and a group of tough, cold-eyed strangers arrive at a dusty town in the American West. They are after just one thing, and it is there for the taking. They round up their booty and leave as quietly as they came.

Six thousand miles away the result of that raid is that British customers will today be able to buy their 501 stonewash jeans at their branch of Tesco for pounds 30, instead of having to fork out up to pounds 55. And the American executives of Levi Strauss management are left gnashing their teeth.

This was the latest skirmish in the denim war between Levi Strauss and the high street supermarket chain. The first salvo was fired in March when Tesco began to sell the fashion jeans at a price significantly undercutting the manufacturer's official outlet.

Levi Strauss went on the counter- offensive stressing that Tesco were selling the clothing without its permission, and then banning the store from receiving its supplies.

This was nothing to do with the fact that the Official Levi Store in central London was charging pounds 25 more for the garments, said the company.

Rather it disapproved of customers buying their jeans in between picking up baked beans and loo rolls. It gave the wrong image to what is meant to be the must fashion accessory for cool dudes.

Tesco decided in response to carry out guerrilla war in the enemy's own backyard. It sent off teams to buy directly from retailers in the United States, concentrating mainly on small towns, where the jeans could be had for as little as pounds 18. More than 32,000 pairs were bought and shipped over.

The new supplies, which come in indigo, black and stonewash, went on sale yesterday at 128 stores across the country at pounds 30 each.

Simon Uwins, Tesco's commercial director, said: "We have approached Levi's again to see if they would reconsider their decision and supply us direct with stock. Again they have refused to deal with Tesco. So this time we have bought a quantity of 501s at retail price in the US."

" If we can buy them in the States for about pounds 18, why are consumers paying up to pounds 55 in the UK? I think it goes even further to show the consumer how expensive Levi's are in this country." In March Tesco had bought 45,000 pairs of 501s from a Levi factory in Mexico for their first cut-price sale. Within days the whole consignment had been snapped up. But after that Levi Strauss blocked further supplies.

Levi Strauss had spent millions on the 501 brand, reviving pop songs and featuring the Russian model Kristina Semenovskaia in a television advertisement campaign. But despite that, the market share of its jeans had fallen by 5 per cent as demand had grown for other brands.

The company denied it tried to control prices. A spokesman said it was a matter for individual stockists.

However, there are strict conditions the stockists must meet. These are that staff should be extensively trained in the subject of "jeanswear", that there should be a clearly delineated Levi's area and a range of styles at different prices. Tesco has not met them.