Levi Strauss CEO Michelle Gass was out for a run in San Francisco final March when she first heard the tune “Levii’s Denims” from Beyonce’s newest album, “Cowboy Carter.”
“Actually, I obtained chills,” Gass recounted to CNBC, including the name-check represented a “as soon as in a lifetime” advertising alternative she could not afford to squander. “She is likely one of the most celebrated and influential artists of our time. … We requested the query, ‘Might there be one thing extra?'”
Six months later, Levi introduced Beyonce would star in a new world advertising marketing campaign. Then, a sample that is repeated itself since Levi invented blue denims greater than 150 years in the past occurred once more: rivals raced to catch up.
Hole and American Eagle launched their very own star-studded campaigns the next summer season in a bid to promote extra denims. Hole partnered with lady group Katseye in its viral made-for-TikTok “Milkshake” advert, whereas American Eagle selected actress Sydney Sweeney for its controversial “good denims” marketing campaign. Simply earlier than Thanksgiving, American Eagle launched one other superstar marketing campaign with a unique sort of star: Martha Stewart.
Some smaller manufacturers that may’t pay for a reputation like Beyonce have gotten free advertising simply from celebrities sporting their denim. In late August, Kylie Jenner posted an image of herself in True Faith denims, resulting in a spike in gross sales, CEO Michael Buckley informed CNBC. He known as it the “final praise.”
Industrywide, manufacturers aired practically 70% extra denim TV spots this yr in contrast with final, as the worldwide denims market swelled to $101 billion, up 28% since 2020, in line with information from TV outcomes firm EDO and market analysis firm Euromonitor Worldwide.
Behind the large campaigns have been hints about every retailer’s methods and challenges. American Eagle is making an attempt to win over extra males. Levi’s needs to court docket extra girls. Hole is working to search out relevance amongst a brand new era of buyers.
However taken collectively, the advertising reveals the lengths firms are going to dominate a rising denim class that’s nonetheless up for grabs — even when Levi could have created it. In an economic system the place many consumers are pondering twice earlier than shelling out for a brand new pair of denims, retailers are scrapping tougher than ever to win each greenback they will.
“There positively is a denim battle. There is a battle for individuals’s consideration. There is a battle for individuals’s spend,” mentioned Neil Saunders, retail analyst and GlobalData managing director. “Who has probably the most snug denim? Who has the softest really feel? Who has the very best cuts? What suits me nicely? There’s rather more consideration within the buyer shopping for course of than for another merchandise, so it does make it rather more of a battle between the retailers.”
Why retailers are betting on denim now
Like all issues in style, denim goes by means of cycles. It is a stalwart garment in any closet, however generally it is in style, and generally it isn’t.
The final time denim was this massive was through the 2000s when manufacturers like True Faith and Joe’s Denims have been a favourite amongst A-listers earlier than athleisure turned extra common and remodeled informal dressing.
“Once we got here out of Covid, I believe to me that is actually when it began, after we began to see customers mainly say, ‘Look, I need to really feel like I’m not sitting in my home anymore, I need to really feel like I get dressed as much as exit,'” mentioned Janine Stichter, a retail analyst and managing director at monetary providers agency BTIG. “That sort of began to carry in regards to the denim cycle that we’re in proper now.”
In previous denim booms, sure cuts dominated, like skinny denims within the 2000s and bell bottoms and flares within the Seventies. This time round, any minimize goes, and customers are transferring past denims to a greater diversity of denim clothes, creating a much bigger market alternative.
“Now we’re seeing every thing from extensive leg to barrel leg to bootcut. All of it sort of has a spot,” mentioned Stichter. “That is a purpose why firms would possibly need to make investments behind it, as a result of there’s simply so many kinds that customers are accepting proper now.”
Denim has been a vibrant spot for retailers in a sluggish attire market, however they’ve needed to combat tougher for shopper consideration as extra rivals spend money on the house. Youthful buyers are prioritizing worth over model loyalty, cash-strapped customers are pulling again on new garments and the class has grown more and more aggressive, analysts mentioned.
A lady walks subsequent to a poster of Beyonce’s Levi Denims marketing campaign on Wednesday, Oct. 23, 2024 in Los Angeles, CA.
Michael Blackshire | Los Angeles Instances | Getty Photographs
Main attire gamers like Levi, Hole and American Eagle aren’t simply competing with each other. They’re additionally vying in opposition to rising manufacturers, fast-fashion retailers and thrift shops, the place many Gen Z customers would possibly go for a classic pair of denims as a substitute of shopping for new.
To chop by means of all the noise, firms wanted to go massive with their advertising campaigns, mentioned Saunders.
“The entire world and his spouse are on denim for the time being. Everybody’s pushing and speaking about it, so they simply wanted to do one thing that was just a little bit extra edgy,” Saunders mentioned. “They did not need to play it secure, as a result of that is not likely going to make noise out there.”
For Hole and American Eagle, each legacy mall gamers with fading relevance, the denim play goes deeper than simply driving income. In a manner, they’re reintroducing themselves to a brand new era of consumers as they work to reclaim their standing in style and tradition.
“Leaning into denim and having these massive campaigns round denim is a part of a wider push to reinvigorate the manufacturers, and I believe that is why they’ve gone all out on it, as a result of they see denim nearly as a halo that may shine gentle on the remainder of the model and the issues that they are doing,” mentioned Saunders. “It is the relevance play as a result of … American Eagle had develop into just a little bit stale and was fighting the outcomes, Hole is within the midst of a reinvention to essentially attempt to make the model rather more related, particularly to youthful customers.”
In an interview with CNBC, Hole CEO Richard Dickson mentioned the Katseye marketing campaign allowed the corporate to succeed in a large set of customers in a strategic manner.
“It has completely resonated with Gen Z, who remains to be within the discovery part of the Hole model,” he mentioned. “However what it additionally did is, it bolstered loyalty with our core shopper. So once more, we’re bridging the era hole by interesting to a number of audiences.”
Hole Inc. Katseye
Supply: Hole Inc.
Whereas the market has been flooded with denim commercials, the content material of the advertisements is having a huge impact on engagement, EDO mentioned. The effectiveness of denims advertisements, measured by shopper engagement like searches and website visits, improved 9% yr over yr from January by means of August, suggesting the artistic messaging behind the spots issues greater than frequency, EDO mentioned.
Levi’s denim advertisements have been 304% simpler than the typical clothes advert, even after it in the reduction of on airings by practically a 3rd, mentioned EDO.
How did massive denim advertisements carry out?
Retailers do not disclose how a lot they spend on particular person promoting campaigns, however these investments are a part of an organization’s promoting, normal and administrative prices, which they disclose in filings.
In Levi’s fiscal yr ended Dec. 1, 2024, which covers the debut of its Beyonce marketing campaign, the corporate’s SG&A bills have been practically $200 million greater than the earlier yr, greater than half of which was spent within the quarter the marketing campaign debuted. The corporate beforehand acknowledged the Beyonce advertisements contributed to the upper prices, and Gass informed CNBC it was a wager price taking.
“The Beyonce marketing campaign had an ideal return for us,” mentioned Gass. “Once we have a look at our enterprise outcomes, our gross sales are rising, however our earnings are rising as nicely general, so we be ok with the funding.”
Since Gass took over, profitable over extra feminine buyers has been on the core of her technique, and the corporate’s Beyonce marketing campaign helps it obtain that aim. Final October, days after the marketing campaign launched, Levi mentioned its girls’s enterprise represented about 35% of general income. A yr later, it is about 38%.
“It is driving a number of our development. That needs to be half of our enterprise,” mentioned Gass. “Based mostly on the momentum we’re seeing, there is no purpose why we will not obtain that.”
“When Kylie posted, not solely did she put us in a narrative, however she put us in a carousel as a tough submit on her wall. She most likely expenses $500,000 to 1,000,000 {dollars} for that,” mentioned Kristen D’Arcy, True Religions’ chief advertising officer and head of digital development. “The outcomes of these posts, particularly on girls’s denim gross sales, was fairly unimaginable.”
Since American Eagle’s and Hole’s campaigns are newer, it is too early to say how they’ve affected long-term gross sales. However they’ve already made their mark in tradition and on Wall Avenue.
An American Eagle commercial that includes actress Sydney Sweeney on a billboard in Instances Sq. in New York, US, on Thursday, Aug. 7, 2025.
Michael Nagle | Bloomberg | Getty Photographs
When American Eagle introduced its marketing campaign with Sweeney, the corporate turned a meme inventory sensation, solely to see these positive factors erased after it confronted criticism over the advert’s tone and messaging. Later, President Donald Trump weighed in and known as it the “hottest advert on the market,” main the inventory to soar as soon as once more.
“It was billions of impressions. I imply, it was superb what occurred. It struck a brand new dialog,” Jennifer Foyle, president and govt artistic director for AE & Aerie, informed CNBC in an interview. “Once we launched that marketing campaign, we knew it was going to be thrilling nevertheless it actually took off.”
Some information studies advised foot site visitors on the firm’s shops fell within the aftermath of the advert. Nevertheless, the corporate later mentioned site visitors throughout channels had been “constantly constructive all through August,” the month after the marketing campaign launched.
Following the Sweeney advert and one other marketing campaign with Kansas Metropolis Chiefs tight finish Travis Kelce, the corporate mentioned in early September it had seen “significant enchancment within the enterprise,” with development in comparable gross sales and the acquisition of 700,000 new prospects.
“It positively helped our site visitors. We positively gained new prospects,” mentioned Foyle. “Be mindful, these new prospects do not at all times come proper again and store, proper? So, positively there will be a halo impact for certain as we head into This autumn and future seasons.”
Following the controversy over the marketing campaign, American Eagle apparently eliminated one of many advertisements from most of its social pages – the one the place Sweeney discusses genes being handed down from guardian to offspring that incited probably the most blowback and comparisons to eugenics. The spot is now solely seen on American Eagle’s Fb web page. An organization spokesperson denied the retailer took the advert down, saying “as soon as content material is launched, it is out for the world to see.”
American Eagle declined additional touch upon the Sweeney controversy. A couple of week after the advertisements got here out, it posted a press release on its Instagram web page saying the marketing campaign “is and at all times was in regards to the denims.”
When American Eagle issued fiscal third-quarter outcomes on Tuesday, it was the primary time buyers obtained to see a full quarter of impression from the Sweeney and Kelce campaigns. Whereas the corporate mentioned that the campaigns are “attracting extra prospects” and creating extra consideration across the model, the outcomes confirmed they don’t seem to be but a serious income driver.
At American Eagle’s namesake banner, the place the campaigns have been centered, comparable gross sales grew simply 1% within the three months ended Nov. 1, worse than the two.1% analysts had anticipated, in line with StreetAccount.
In the meantime, SG&A bills have been up by about $35 million yr over yr, due largely to its campaigns with Sweeney and Kelce. The rise in prices did not have a serious impression on American Eagle’s working margin, which got here in greater than anticipated.
Final month, Hole mentioned comparable gross sales at its namesake banner surged 7% within the quarter after the Katseye advert got here out — greater than double what analysts had anticipated, in line with StreetAccount.
“The model noticed development in [average unit retail], consideration, natural impressions, new prospects, so producing vital site visitors,” Dickson informed CNBC. “Double-digit development in denim, 8 billion impressions, so we’re very happy and excited in regards to the long-term proposition and the continued progress the model is making.”
In the meantime, the marketing campaign has been a viral sensation, racking up 50 million views on YouTube alone within the final three months. That is 5 occasions the ten million views American Eagle’s Sweeney advert noticed on the platform in 4 months. Nonetheless, each of the advertisements mixed do not come near the engagement Levi’s Beyonce marketing campaign has seen on YouTube. The 4 “chapters” of the marketing campaign, which have been launched between final September and August, have garnered a staggering 85 million views mixed.
“Levi’s is unquestionably profitable the battle general. I imply, that is Levi’s house turf, you are taking part in within the house stadium, in order that they have an inbuilt benefit,” mentioned Saunders. “They’ve been very savvy about creating the tradition round denim. They have arguably the most important superstar on their workforce, and so they’ve widened the life-style aesthetic, in order that they’ve actually led this.”
