Michelle Gass on leadership, taking risks and her vision for Levi’s

Episode transcript, edited for clarity

Bill Thorne: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone everywhere, every day. I'm Bill Thorne from the National Retail Federation, coming to you from NRF 2024: Retail's Big Show in New York City. 

And on today's episode, we're talking to Michelle Gass. She's currently president of Levi Strauss and Company. But by the time you hear this, she'll have been named CEO. We're going to talk to Michelle about her vision for Levi's, her 30-year retail career, and what the future of retail looks like. 

Michelle Gass, welcome to Retail Gets Real.

Michelle Gass: Thank you, Bill. It's a pleasure to be here.

Thorne: I need to start with congratulations and congratulations. That's absolutely fantastic. I love the story. I think it is a story that students and people that are just starting out in the industry need to hear because it's a story of opportunity. It's a journey, and it's a story of success.

Gass: Yeah. No. It's both a tremendous honor to be stepping into the CEO role of Levi's – 170-year-old company, an iconic global brand. I mean, who doesn't love Levi's? And actually, following in the footsteps of a very successful CEO in Chip Bergh, and he's done incredible things, so I'm looking forward to carrying that forward and taking it further.

Thorne: It’s kind of cool when you think about that you work for a company, a brand, that if you go anywhere, you don't have to explain what it is. It's Levi's. You don't have to go into detail about what Levi's does. Everybody knows Levi's, so that's kind of way cool. 

Gass: It's incredible. I mean, you can look around the world, you know, and probably count on your two hands the kinds of brands that come to mind like that. So recognizable. But I also think with a brand like Levi's, there's such a deep emotional connection. When you talk about Levi's, everybody is eager to talk about their first moment, their story with Levi's — even in my time here, just, you know, no matter who it is. I could be getting my hair done and I'm hearing a Levi's story 

And it's, you get … it happened to me yesterday, and you get so proud. You're so proud to be associated — and the whole, all of our employees. If there's a word that comes to mind, it's pride and love for this incredible brand.

Thorne: I have Levi's that are probably, I don't know, 20-plus years old. And, I don't think that I have ever taken a pair of Levi's and said, ‘Oh, that's going in the Goodwill pile.’ I couldn't part with them. I mean, I can't wear them, but I can't part with them.

Gass: There you go. There you go. I think some would say they get better with age. It’s like wine.

Thorne: Yeah, they absolutely do. Exactly. Alright. But I do want to start with Michelle Gass. Now, you've had a phenomenal career. Kind of walk us through what got you into retail, and how did you get to where you are today?

Gass: That’s a big question …

Thorne: It is a big question …

Gass: You're very, very generous. I just feel so privileged that I've had the opportunities I've had, and, you know, it's now 33 years. It's hard to believe. And I've worked for amazing companies, and I've learned something all along the way.

I actually got my undergraduate degree in chemical engineering, which that's, you know — how did a chemical engineer end up running an apparel global icon? But there's, you know, they're deep in there, right? What does an engineer like to do? They like to solve problems. I just like to solve consumer problems. 

But back to your question, and I'll make it brief. Coming out of school, I did start my career at Procter and Gamble. Actually, started in product development because I was an engineer, but I soon moved into brand marketing, and that's really where I fell in love. I fell in love with brands, and all things consumer, and again, could apply that engineering mind, but thinking about things more around how do we, how do we talk to consumers, and how do we surprise them, and do things differently?

After about six years, my husband and I moved to the West Coast, and I had an opportunity to join Starbucks. It was actually my husband's job that took us there, ironically. It was 1996, and I like to tell the story when I joined Starbucks, little did I know that I was going to be part of one of the biggest, most successful business and brand stories of our time. 

I was there for close to 17 years and learned so much, worked with some of the most amazing leaders of our time. As you know, know who those folks are — Howard Schultz and Howard Behar, and many others that really shaped who I am today and gave me lots of opportunity. But to set context, I joined and there were less than a thousand stores, and when I left, there were 20,000. 

That's really where, I would say, bringing my brand and consumer passion, and then layering in innovation. Thinking differently, and I think importantly, what it really means to be a leader of service, right? And how you take care of the front line or — as they say at Starbucks — our partners. Because at the end of the day, that's who's serving the consumer. And the importance of being a purpose-driven company. I could give you lots of stories and examples (we can go back to that). But let's just say that really, really shaped so much of who I am. 

Come 2013, I had the opportunity to take those learnings, and apply it to an area I am really passionate about, which is retail. Kind of more traditional big box retail and apparel. So, Starbucks — clearly a retailer, but coffee retailer, let's call it. And then moving into more traditional retail, and spent a decade at Kohl's. Came in on the consumer marketing merchandising side and then took on the CEO role in 2018.

I think the biggest learning there was all about omnichannel. I joined and Kohl's was — as I think most companies of that type were — really brick-and-mortar retailers. Everything about the company was wired that way. And to come in at a time of disruption, that really attracted me because I love opportunities like that. I love disruption. I love innovation, and say, ‘We've got to pivot this company to become digital and omnichannel.’ And really pleased that we did that. Our ecomm business went from about a $1 billion to $6 billion during that time, and in an environment where there was lots of competitive pressure from all angles, having to reinvent itself and forge new unconventional partnerships like with Amazon to have a joint win of accepting returns. Or, right before I left, the partnership with Sephora that is on its way to be in every Kohl’s store, and that's a game changer for the company.

And then to, I guess just to end it off, I get this call in the fall of 2022 from a friend I adore, from Chip Bergh. I said, ‘But do we have a conversation?’ And, it was like, ‘Oh my gosh, this is a dream come true.’ It's Levi's. One of the most iconic brands, not only in in the U.S. but in the world, and I would say, you know, I had even underappreciated how powerful the brand had become outside of the U.S. 

And also, the opportunity to work alongside Chip, who is a leader that I had long admired. We got to know each other very closely during the pandemic, and leaned on each other. And so, I really trusted him, and we did something very unconventional. For someone, a supplier, to hire one of your top customers, bring that together — but I just had so much belief and trust in the process, and of course, was so excited about joining the Levi's team.

Thorne: Yeah, for sure. I think it's really kind of cool when you think, too, you had a multitude of brands that you were working with at Kohl's, obviously. Now you're working for a brand — Levi's. So, when you walk around, do you look at people's jeans now differently?

Gass: Oh, 100%. I'm always looking. I won't say where, but I'm always looking to see what's the back pocket. But I usually can tell from the front too. But no, absolutely. You know, I like to say that all my experiences and the one thing I — just to come back to that sort of purpose, culture, people — I mean, that was very big at Kohl's too, and I knew from the outside how values-based Levi's was, and it's an amazing product. And it's an incredible brand. So, you bring all these things together. But I do feel like this opportunity is the culmination of everything I've done in my career. Brings all those experiences together. 

And I'm coming at a time where the brand has never been stronger. The opportunities ahead of us — I mean when we talk about our three key strategies, everybody in the company can recite them. So, when you're uniform, that's really important. But being a brand-led company, right, making this big pivot where we've traditionally been a wholesale-driven business to becoming a DTC-driven business. Wholesale's not going away, that continues to be important. But our business as we look out, will actually be majority direct-to-consumer. It's very different from a company that grew up as a wholesaler. 

And then third, the diversification opportunities that we're already seeing. Diversification internationally (we can come back to that). So many opportunities. Some of these countries we're literally just getting started. Diversification as it relates to … if you stay within the Levi's brand, going beyond the 501 and the blue jean to all things denim. We talk about denim dressing, and I've got to tell you, as a woman, we're going big after denim skirts and denim dresses. You know, there's more denim jackets we can do, and then the right tops and accessories that complement. We see that in actually some of our markets, even in places like India where they do a bit more local development, and the consumer's responding, so we can take that around the world.

And then beyond Levi's (and if you're interested, we can talk about the two other brands) but Dockers continues to have opportunity, and we purchased Beyond Yoga just a couple years ago. I'm personally very passionate about that brand. I do do yoga. I'm very active in the outdoors. But that's a category that's going to continue to grow and so we can play in it, but you can see a lot through Levi's, but then compliment with these other two brands. You know, we are today, and we're going to be, an even bigger force in the apparel industry.

Thorne: It's amazing. So, I really didn't correlate the two. So, I not only have my Levi's in my closet, but I have my Docker khakis in my closet. So, I'm really a Levi's-driven buyer, I guess. Yes. And I didn't even realize.

Gass: We love that.

Thorne: So, the one thing I wanted to ask you about, because you've mentioned it a couple of times, you know, when we talk about purpose-driven. Define that for me. I mean, how as a retailer can we be purpose-driven?

Gass: It's a big question. First off, I think it has to do with the legacy of the company, the leaders of the company, really believing that we're here not just for profits. That we're here to make a real difference in the world. Now, I would argue that all retailers do to some extent, because they employ, and they put dollars out into the communities. But I believe we have a responsibility to do so much more than that. 

And if we just talk about Levi's for a moment — your employees have to believe it, right? And they have to see the leaders at the top kind of walking the walk. It's no longer just about one thing. Your values, your commitments really need to cut across the areas that either you touch from a business standpoint or that you feel like, you know, it's important to our employees and we're going to take a stand. 

So, you have to be very thoughtful, and as I was saying, LS&Co. has a very long history from the very beginning to make sure that it was something more than just making money, right? And the term that has been everlasting here for a long time is ‘we drive profits through principles.’ Profits through principles. And there are many ways we do that. 

I mean, it's everything from, you know, as we work with people who make our product, ensuring that we are advocating for workers' rights. It's ensuring that we're giving back to communities where we can help and communities we serve. A good example I like to use very close to home for LS&Co. is the Red Tab Foundation, where it is about employees donating their hard-earned money so that their coworkers who are in trouble and need, you know, help … and it might be something related to their house, it could be … sometimes these are small, like from retired front-line employees, they might need a new pair of glasses. It runs the gamut, but everybody's participating. We also have an LS&Co. Foundation, that has really amazing causes. It’s where you put your dollars, again, ensuring it's relevant to your employees. It's connected to your business. 

And then it's also where and how you speak up. And you know, I think that the role of a CEO is not just leading the business. Yes. But it's also caring for your employees, and all of that. I'm super passionate about that. And I'm really passionate about, when we think about now Levi's becoming a retailer, making sure that our teams, especially in our corporate headquarters, are of service to our front line because they're the ones who are really connecting with the consumer every single day. That might be our stores, and it could be our distribution centers, and everything in between. But then as issues surface, that we have a voice, and we talk about things, and reassure employees that, ‘yes, we get it. We're here. We care.’ They need to hear our voice and as we like to say, we want to make sure that we're on the right side of history on issues.

Thorne: You know it's interesting because we do the student program adjacent to the Big Show, and we just hear them talking about the desire to work for companies that are purpose-driven. They're very attentive to that, and I think it's really important that the companies not only talk about it, but can show how they're doing it. And I know Levi's has been out front on a lot of issues that some people would say, ‘Why are they even involved in this?’ But it's part of their culture. It's what they believe, and you just verbalize it incredibly well. So, thank you for that. 

Another question that I have for you, and we talked a little bit about it before we went on air, and that is diversity in the C-suite, in retail specifically, but generally. What can we as an industry — as Levi's, you as a prime example of the opportunity that can be afforded to so many people — how do we make a difference?

Gass: First I believe we all have to view that it's our job and we have to take personal responsibility, right? Many companies now have [a] chief diversity, equity and inclusion officer. It's not their job. They can help facilitate. They can help teach. But every leader and every employee has to take on a level of responsibility to create a diverse, equitable and inclusive environment. You know, not only is it the right thing to do, but it makes for better business. I mean, you want all teams at all levels — whether you're talking about a great store team all the way up to the C-suite — to be diverse, to be inclusive, to be equitable, like I said, because that will generate the best outcomes. 

And as I think about — so let's talk about the C-suite. Employees want to be able to look up, and relate, and say, ‘I see someone up there who looks like me. I could do that someday.’ And then, guess what? It's our responsibility as leaders to create the conditions so that someday they might be up there if that's what they want.

You know, as it relates to the employee base: It isn't about just, OK, go out and hire a bunch of high-level executives. It's really about cultivating it from the very beginning. Right, so, you start with the intern program. You do things like we're doing here at the NRF. I love all the student programs, and I hope we continue to do more of that as part of the NRF, but you know, having conviction to have a very diverse intern base, when you're bringing in new hires, having  programs throughout their development to ensure that they are getting the kind of skills, training, and that they're feeling included throughout the entire process. 

You know, I have to throw out a fun fact about Levi's — not only am I proud to be the next CEO, and I'll be a female CEO, but our executive team is – I think the number is about 70% female are C-suite. Our top team. We are amongst the highest in retail.

Thorne: That's great, Michelle. Congratulations.

Gass: Yeah, and there should be more examples like that. But it is diversity. It's not just women. It's total diversity — it’s men, and it’s people of all color, and it’s diverse points of view, and it's, like I said, the responsibility of the leader is to create the environment so that everybody can do their very best work.

Thorne: Absolutely, it’s for the associates, for the home office, for people in the stores, but it's for the customer as well. They want to go to and give loyalty to a brand that reflects them. I mean, it’s just as important if you want a loyal customer. 

Gass: Just as important, and I'm really glad you brought that up. You know, it gets back to the aggregate values, or being purpose-driven, and consumers putting a lot of importance on that, and they should. But even like when you're in retail, right, when you are in a store, and you're bringing a customer in, they want to see people who look like them. And you make better decisions, right? You make better decisions across the board. So, you know, we need to do more, right? I think we're still in the early chapters of, for all of us, but every day we have to take personal responsibility.

Thorne: There was a question that somebody asked recently, and I thought it was very intriguing because it got me thinking and it was — and it was actually a student asking one of the presenters at the student program — and the question was: What would you tell the 16-year-old you to let go of, do differently, be confident? What would that advice be?

Gass: The 16-year-old me. Yeah, that’s always an interesting question. I would just say, things will unfold as they're meant to be, and you know, it's never a linear path. I think folks who get too caught up and especially in your early part of your career and being fixated on, I want this top job, or I want that. That's the wrong focus. I mean, to me, the focus should be showing up and doing the best job you can, making sure it's something that you love to do.

Thorne: So important.

Gass: And if those things aren't connected, then you need to pivot whether it's inside your own company or somewhere else. And don't be afraid. Exactly. Some of the best decisions I've made over my career were moments where I took a big risk. I mean, when I left Starbucks (love Starbucks, I still love Starbucks) to go to Kohl's, that was kind of a big, big change, right? But, it was … And when I left P&G I'd say that was even a bigger one. I mean.

Thorne: That’s a huge difference. One, you are product-driven, and now you are retail. 

Gass: Right? Exactly. And an entrepreneurial company and all those kinds of things. But I look back at those, and when you look backwards, it all makes sense. But I think of those moments when you kind of get those butterflies and you're like, ‘OK, OK, and I'm excited. I'm a little nervous.’ But, you know, trust your instinct. 

I mean, that's the other piece of advice I would give to my younger self is: Trust your instinct. Be informed. Don't be reckless. Some people think taking risks is about being reckless. It couldn't be further from the truth. There's always great data, but whether it applies to a personal decision or a business decision. I mean, most big innovations — just to go there for a moment — they don’t come out of safe bets. You don't have perfect information. You know, I had mentors along the way who also helped me and cultivated that in me, to trust my instinct and try things. And you know, you can do more of that when they're smaller decisions and there are no regrets. Obviously, when they're bigger ones, you spend more time, but even the big ones. But that's what makes business and retail so exciting.

Thorne: You know, it’s interesting because — what you just said, I say that a lot and in, when I have my mentees and we're talking about risk. I always tell them, ‘You'll know. You will know, you'll go to bed thinking about it. You'll somewhat dream about it. You'll wake up thinking more about it. It excites you. It panics you. But you're more enthusiastic, and you think maybe this is the thing.’

Gass: I love that you say that because I often say that, too. That when I am processing: there's data, there's intuition, there's the market, there's the consumer, there's the brand, and there's a whole bunch of things going on. Like — and that's another example — it's not always linear, right? Especially on the big, bold moves. 

But you … I like to say, you have to simmer on it, and the expression, you sleep on it. And for me, from a personal standpoint, especially on the ones that I'm like, I just need to, I need a little time. You know, I love the outdoors. I get rejuvenated. I love to hike. I love to run. So, oftentimes, on a run on a beautiful day — as I'm thinking about various things that maybe are surrounding a decision — that I will get that a-ha moment on a run.

Thorne: So, what excites you most about the future of retail?

Gass: Oh boy. Well, I can answer, I guess, two parts. First, let me talk a little about Levi's and the future of Levi's as a retailer. You know, I said, coming in, I believed in the strategies, I believed in the company — they're very clear. 

I think what I had not fully understood — just because I hadn't been inside the company — is what a big lift it is going to be to really pivot this company to become a retailer, right? And all the process, and how we work, and the speed, and the … and especially the culture, how you really think like a retailer. How you go in a store, and you think like a merchant, and you become obsessed about … is the 32/32 size of the 511 not there, and why isn't it there? And why didn’t the shipment come in? Retail detail, as they say. And I don't know that we have that muscle fully developed. So, I'm super excited about culturally, like, I want to go out a couple years and look back and be like, ‘Wow. That's when we really made that pivot.’
I also like the fact that omnichannel, and omnichannel for Levi's, is really about putting the consumer fully at the center, and we're going to serve them in any way they want to shop, right? So, if that is a Kohl's, Macy's, Target, Amazon, Walmart, whoever, fine, and we've got products that serve all those consumers. But where they're going to get the fullest, biggest expression of our brand that we can control. It will be in our stores and it'll be online. 

And so, then that builds to the question you ask about, what excites me about retail is: It's just ever changing, and you've got to be right there, and ideally a step or two ahead. You have to see the trends. You have to start playing with things or trying things when they just seem kind of crazy, right, because we sit here today at a moment where there are more ways to shop and experience brands and products that if someone would've told us 10 years ago, we wouldn't have believed.

So, what is that going to look like 10 years from now, from now, and I think retail is one of the most dynamic, exciting businesses, and so I'm thrilled to be part of it.

Thorne: You know, it's funny, Michelle, you talk about change, and I tell people all the time in this industry, in the retail industry, if you have two choices, you can either reject change. You can push it off, you can get angry about it, frustrated because of it. You can badmouth it. You can get others to question it. Or you can embrace it. You can run with it. You can bring others with you to invest in it and you will succeed because retail is changing every single day, and the opportunities are limitless. But you've got to be able to embrace change and accept that.

This has been incredibly interesting, by the way. Best piece of career advice you ever got or have given?

Gass: Let's do the latter because I feel like I talked a little bit about advice I've gotten around trusting your gut. Be informed, but instinctual. 

Often the advice I give to people young in their career is to be patient. For folks who, you know, they just want to zoom up, you know, you don't get to these levels without having the right experiences. I love the things that I've done over my career that have been successful, but I also appreciate the things that didn't go as planned, right, because those are where you're really tested. By the way, when you're tested and maybe it doesn't go as planned, it actually gives you more resilience to go tackle the next thing, right, and gives you context. 

The advice I give is \, be patient. You know, when you have even, maybe you're thinking, ‘I'm going right up the ladder, ‘but a unique, maybe off-the-wall opportunity comes forward, you know, really think about that. Embrace it if you think it makes sense. I think as they say, patience is a virtue, and I think as you're developing your career when you're young at it, just take this opportunity to learn. You know, people are going to be at this a long time. I still can't believe I'm saying, you know, I've been in business for 33 years. Like, how'd that happen? I have two grown kids.

Thorne: Well, earlier when you were talking the 33 years and all the things that you’ve done, I was like, what, did she start at 10? I mean, that's pretty amazing. The opportunities, and the other thing is that you stayed. You didn't just do it for a couple years. You stayed, you really grew and learned, and then the time came and you made the decision to go somewhere else, to take the leap to grow, to learn, and then you got another opportunity. It’s just a wonderful, wonderful story. 

Gass: Yes. Yeah. It's a good point. I feel a deep attachment to every place I've been because., again, they've been long journeys, right? These weren't in and out. 

I guess one other piece of advice, maybe as we're talking — since I did bring up the fact like, wow, it's really 33 years, and I have two kids that are now out of the house, is — maybe I would just say that: Whether you're a CEO, leader or any role, we’re all people. We're human beings, and I guess doing a podcast like that, I have to do a shout out for my support system. It starts with the family. Married for a long time, two fantastic kids, but my husband and my kids, they inspire me every day. I know I didn't get it right all the way there, too. But I think, you’ve got to think about your whole self. We’ve got one life so I advise people: Take care of you, take care of your health. You know, it's not just about work. Actually, doing those things makes you a better leader at work too.

Thorne: That's a great way to end this. Michelle Gass, thank you so very much for being a part of Retail Gets Real.

Gass: Thank you so much, Bill, for having me. 

Thorne: And thank you for your leadership in retail as well. It's inspiring. And thank you all for listening to another episode of Retail Gets Real. You can find more information at retail gets real dot com. From Retail's Big Show in New York City at the Javits Center, I'm Bill Thorne. This is Retail Gets Real. Thanks for listening, and until next time.