NEW DELHI : American fashion retailer Levi’s beat third quarter estimates globally with demand for denims holding steady and pent-up demand for fashion apparel helping drive sales. In India, too, the company did well by renovating existing stores and adding larger outlets, besides appointing actress Deepika Padukone as its brand ambassador and launching a new collection in collaboration with her. In an interview, Sanjeev Mohanty, senior vice-president and managing director, South Asia, Middle East and Africa, Levi’s, said the consumer’s preference for casual and athleisure wear has been a clear tailwind for the brand. Edited excerpts.

Globally, Levi’s reported a strong third quarter. Is India mirroring similar trends?

We are seeing a similar bounce back across the board, including in India. In India, in denim particularly, we have had a strong recovery right since the first wave. Now we are seeing festive momentum and the recovery is very strong. It’s sort of a V-shaped recovery.

Is Levi’s India back to pre-covid levels?

I think we are back to the pre-covid levels, earlier than the market. If you look at apparel, the denim category is growing faster than overall apparel growth. The kind of action we have taken in the last 18 months are really helping, especially, the kind of stores we have opened in the last 12 months. We had a reset sort of a strategy wherein we invested ahead of the market while everybody was really worried about what’s going to happen post covid. In the top 100 stores we are going to increase the size or relocate. These stores are coming up in Hyderabad, Mumbai and many other locations. We are opening up larger stores and, as a market leader, we are finding that post pandemic we have emerged much stronger. This, along with the fact that we have invested in marketing with Deepika Padukone as brand ambassador set us up for faster recovery than the market and category.

What kind of return on investment (RoI) did you expect when you signed up Padukone?

You’d be surprised. I can’t give you the numbers, but the RoI is just tremendous. It is not just about the return on investment on the sales of the products but the kind of new, younger consumers we attract, that is, Gen Z and millennials. Also, this creates a sort of a halo effect. A lot of the young consumers also come and discover that look, we have 26 fashion fits. So, it creates a sort of flywheel effect from a future standpoint and ensures a perception that Levi’s is not only jeans but a head-to-toe collection.

As offices reopen, will demand for formal wear return?

There has been a sort of a tectonic shift (when it comes to fashion apparel). There is nothing called casual versus formal now. The whole discussion is around what kind of casual wear. I don’t see formal wear getting much of traction. The lines between office and home are blurring. A lot of companies are also, globally and in India, continuing a very strong work-from-anywhere policy, which means that consumers are going to hurtle towards casual wear at a pace that we could not have imagined. That is a tailwind for brands such as Levi’s. It’s going to get more and more casual. If you look at this festive season, the brand is showing tremendous amount of traction. We are heading towards one of the strongest Diwalis in many years.

Has the average ticket size also gone up?

We’re definitely seeing larger (ticket) sizes across the board. One of the areas that it probably is impacting Levi’s is more of head-to-toe shopping. Consumers are willing to try new things. They are willing to spend. They are coming in with a mindset to really indulge themselves. This has been seen across the board, not only in the larger cities but also in smaller towns. Normally that kind of a jump (in ticket size) is seen over two years.

For most apparel retailers, a significant portion of sales moved online. Is it still going strong?

The strong trend in e-commerce has continued. I won’t be able to give you a number, but the kind of contribution to total business in the last 18 months, would have taken probably five years. Despite the opening of brick and mortar, e-commerce continues to have a very high double-digit growth. We have specific lines for e-commerce particularly and that has helped us capture a large market share.

Is the process of renovating existing stores in India over?

It will continue. We have more than 400 stores. We have taken steps to resize, relocate and rejuvenate our stores. We want to grow segments, categories and basically give that consumer experience. Collaborations such as the one with Padukone or Super Mario or Royal Enfield need space. We want to bring all of that to life in India and we need space for that. We want to also grow our stores from 400 to 500 to 600 over the next few years. Stores will need to be refreshed every year because the network is growing. The tail end of stores is getting older and next-gen concepts are coming in, but we will actually be racing against time to refresh 20-25% of the network every year. Levi’s is also coming up with better and newer concepts globally and we need to get those concepts on board to the consumers.

suneera.t@livemint.com