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July 28, 2000/25 Tammuz 5760, Vol. 52, No.46
Strauss shapes blue jeans, Bay Area Jewish community
JOSHUA SCHUSTER
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 A sewing-machine operator, circa 1910, works at Levi's Valencia Street factory. Photo courtesy of Jewish Bulletin of Northern California |
Does he think, "What each of these guys needs is a nice pair of Loeb's jeans?"
Not exactly.
Aside from the fact that his now-famous jeans brand would not be invented for another 20 years, he had already changed his first name to "Levi" a few years earlier while in New York City.
Strauss was in San Francisco to set up a branch of the family dry goods business. He ended up being first in a long line of heirs who have had a monumental philanthropic influence on Bay Area Jewish life.
Strauss could have easily bucked religion for rampant opportunism in the Wild West. Instead, he kept his biblical name, quickly joined the fledgling Congregation Emanu-El and proceeded to become a standout member of the Jewish community.
Now, Levi's blue jeans have been around for 126 years, and Levi Strauss & Co. is three years shy of its 150th anniversary.
But not all is rosy. Recently, the company offered a rare glimpse into its financial status, revealing that its 1999 earnings decreased 94.8 percent from the previous year. The privately held company, considered the world's largest apparel manufacturer, said its profits plummeted from $102.5 million in 1998 to $5.4 million in 1999, according to a document filed with the Security and Exchange Commission.
But the story of Levi Strauss & Co. isn't just a story of profits and denim. It's also a story of the rise of the Bay Area Jewish community.
Historians and family members say that's the way Strauss would have wanted it.
"It's a great story," says John Goldman, a great-great-nephew of Strauss who lives in the Bay Area and is heavily involved in numerous Jewish agencies. "He was one of the founders of a Jewish community where none existed."
Though few currently consider Levi's to be a Jewish brand name, Strauss' company from the beginning had a high Jewish profile.
"Jewish businessmen like Strauss were consciously known throughout the city as Bavarian Jews," says Fred Rosenbaum, founder of Lehrhaus Judaica in Berkeley, Calif., and the author of the recently published "Visions of Reform: Congregation Emanu-El and the Jews of San Francisco, 1849-1999."
"Not only was there an absence of anti-Semitism, but people respected and admired the Jews. Strauss was very proud of it."
Although almost all the company records were destroyed in fires in 1886 and 1906, the few existing accounts describe Strauss as a man who put Jewish wisdom to practical use in his business.
Rabbi Martin Meyer, who became spiritual leader of Emanu-El a few years after Strauss died in 1902, wrote that Strauss had an "honorable conception of business, great integrity and the ambition to make life expressive of the virtues that should adorn the Jew placed in a station of great responsibility." That sense of integrity in business in a no-holds-barred era of money-making perhaps led Strauss to his biggest payoff.
Nevada tailor and regular Strauss customer Jacob Davis, a Latvian-born Jew, sent a letter to Strauss in 1872 describing Davis' new invention. Davis, who purchased large rolls of cloth from Strauss, wrote that one could use metal rivets to bind together points of strain on denim pants. Lacking the money to apply for a patent, Davis asked Strauss to join him in patenting the process.
The patent was granted to both men on May 20, 1873. Strauss brought Davis to San Francisco to oversee the first West Coast manufacturing site of the "waist overalls." Lot No. 501 was first issued in 1881.
The dry goods business and the sale of jeans, mostly to miners, bustled. Strauss was also pulling in huge profits from his business, and his philanthropic fame was swelling. In the Jewish world, Strauss contributed to just about every charity.
"When Strauss died, the papers referred to him as a philanthropist before a businessman," says Levi Strauss & Co. historian Lynn Downey.
Strauss had no children. He left the company to the children of his brother-in-law, David Stern.
In the company's development, the next big change came when Walter Haas Sr., who married Stern's granddaughter Elise, took over the company. As president of Levi's from 1928 to 1955, Haas dropped the dry goods business and revved the company into a national clothing powerhouse, doubling revenue from $3 million to $6 million.
According to Doug Goldman, Haas' grandson and a great-great-nephew to Strauss, the company also reaped rewards from innovative marketers who built up the cowboy image behind the jeans and the business.
Haas and business partner Daniel Koshland poured grants into the Jewish community. Some credit the Levi's magnates with propelling the Bay Area into the national scene of Jewish life.
"They were the deans of the Jewish community," says Wayne Feinstein, executive vice president of the San Francisco-based Jewish Community Federation.
Walter Haas left the company to his children, who further pumped up the firm to where it had sales of $6.9 billion in 1997.
However, annual sales have dropped by 25 percent since then, falling to $5.9 billion in 1998 and to $5.1 billion last year.
In September, Walter's grandson Robert Haas stepped down as CEO but stayed on as the firm's chairman. Philip Marineau became the new CEO.
The company has been battered as of late by stormy business matters. A leveraged buyout in 1996, which consolidated the company's shares from several family members to just a few, caused internal strife in the company and the family.
And whereas Levi's won praise a few years ago for its unusually generous severance package for laid-off workers, a May 4 document revealed that $344 million in planned employee bonuses had been scuttled because cash-flow targets had not been reached.
| Strauss heirs continue tradition |
Historian Downey said that a few anti-Semitic notes have arrived in troubled times. Still, Downey attests, the company has no intention of disregarding its Jewish past. "It's in the company's DNA," she says.