The tactic: Levi Strauss is reducing its SKU count—even as it expands the range of items it sells—to minimize tariff costs and maximize full-price sales.

Sense of urgency: While SKU rationalization has been a priority at Levi Strauss since CEO Michelle Gass took over in 2024, US tariffs on key production hubs like Vietnam are spurring the company to speed up its efforts.

• It recently agreed to sell Dockers to Authentic Brands Group for $311 million, freeing it up to focus on its core denim and Beyond Yoga businesses.
• Levi Strauss is “taking a harder look at productivity” across its assortments, CFO Harmit Singh said, and is eliminating underperforming styles and colorways to make room for new products that are more likely to sell at full price.

Levi Strauss expects those measures to help it manage the additional cost of tariffs—not only by reducing manufacturing expenses, but also by minimizing markdowns on unsold inventory.

Our take: SKU rationalization is becoming a necessity for Levi Strauss and other brands and retailers looking to manage the impact of tariffs. For many, it’s a familiar tactic, last used only a short while ago to manage pandemic-era supply chain challenges.

By focusing only on the most popular—and profitable—products in their assortments, companies can simplify their sourcing and ease their tariff burden.

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