Khushi Malhotra | August 30, 2023

Levi Strauss India Private Ltd. is planning to cut prices by up to 18% across all segments to push sales as inflation is shrinking the country’s demand for apparel.

The starting price of the company’s iconic jeans will be reduced to Rs. 2700 from Rs. 3300. T-shirts that cost Rs. 1199 today, will be available in the Indian stores for Rs. 999 in 2024. The company cut prices after India’s retail inflation rose to 7.44% in July, the highest in 15 months.

Levi’s also had an excess inventory piled up, according to two people handling the logistics of the company.

“At the current prices, we’re unable to push out as many units as we’d like to,” said an official at Levi’s India on the condition of anonymity. “We’re taking our prices back to pre-covid levels.”

Harmit Singh, the executive vice president and chief financial officer of Levi Strauss & Co. declined to comment.

Consumers are likely to spend less on expensive items like apparel right now, as rising inflation is affecting their purchasing power, said an official at the Apparel Export Promotion Council (AEPC) of India.

Now that yarn prices are falling, brands have more room to reduce prices, said Ganeshram Jayaram, managing director and head of Avendus Spark Institutional Equities.

A Cotton Outlook report by Professor Jayashankar Telangana State Agricultural University, Hyderabad, stated that the price of cotton in India decreased by 4.3% to Rs.55,500/candy in 2023 from Rs. 58,000 in the previous year. Cotton affects 20% of Levi’s cost to manufacture denim bottoms.

“Due to the fall in cotton prices, our cost margins have fallen. We can now reduce our prices to capture a younger market, starting from 16-17 years of age,” said the Levi’s official.

Levi’s competitor American Eagle declined to comment, and Lee Cooper was not available at press time.