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 CHESTNUT HILL, Mass., and SAN FRANCISCO, Nov. 4 /PRNewswire/ -- Levi Strauss & Co. (LS&CO.), the world's largest apparel manufacturer, and Boston-based retailer Designs Inc. (NASDAQ: DESI), operator of 117 retail stores which sell exclusively LS&CO. brand products, today announced an agreement in principle to develop a joint venture to sell Levi's(R) jeans and jeans-related products in 35 to 50 Original Levi's(R) Stores throughout 11 northeast states and the District of Columbia over the next three to five years.
 The agreement, subject to negotiation of definitive agreements and final terms and regulatory and other approvals, is the first of its kind for LS&CO. "As a marketer of value-added branded casual apparel, we want to ensure a consistency of image to our customers around the world. We can accomplish this goal through dedicated distribution channels such as Original Levi's(R) Stores, which showcase our products through visual merchandising that enhances product presentation," said Bob Rockey, president of Levi Strauss North America.
 Designs Inc. President Joel H. Reichman said, "We see this expansion of the Original Levi's(R) Store format as an exciting complement to our existing regional mall and outlet formats. We believe that this partnership is of strategic importance to Designs, will enhance our overall relationship with LS&CO. and will add to our operating performance."
 "With an increasingly competitive retail environment, dedicated distribution, which encompasses states-of-the-art product presentation, is extremely important to enhancing the brand image and in helping consumers make purchasing decisions in an otherwise cluttered marketplace," Rockey explained, adding that the stores, "while of strategic importance, will not replace the retail distribution system in place, and are intended to maintain product image."
 Under the joint venture, which will have a 10-year term, LS&CO. will hold a 30-percent interest and have primary responsibility for merchandising, marketing and image-related operations. Designs Inc. will hold a 70 percent interest and have primary responsibility for day- to-day operations. It is anticipated that either party will have a right to end the venture after five years of operation.
 "LS&CO. has no plans to independently operate a retail business in the United States," Rockey said, "although the program will help us better understand the needs of our retail customers as well as consumers, and enable us to improve service to them." Although not a U.S. retailer, LS&CO. operates six test stores in Columbus and Cincinnati, Ohio. It also operates, licenses or franchises some 500 stores in Europe, Mexico and Canada.
 Reichman said, "Designs' prototype Original Levi's(R) Stores in New York, Boston, Cambridge and Washington, D.C. will become a part of the joint venture and we hope to open the first new stores under the venture in 1994."
 Designs Inc. sells exclusively Levi Strauss & Co. clothing and accessories in 64 traditional mall stores called "Designs," six concept stores called "The Original Levi's(R) Store," two concept stores called the "Dockers(R) Shop," and 45 outlet stores called "Levi's(R) Outlet by Designs." The stores are located in enclosed regional shopping malls, downtown locations and outlet parks in 27 states throughout the eastern half of the country and the District of Columbia.
 Levi Strauss & Co. is the world's largest apparel manufacturer with 1992 sales of $5.6 billion. The company manufactures and markets branded jeans and casual sportswear for men, women and children. The company employs about 34,000 people worldwide.
 -0- 11/4/93
 /CONTACT: Karen Bachmann of Levi Strauss & Co., 415-544-8977; or Geoffrey M. Holczer or Samuel Levenson, 617-739-6722, both of Designs Inc./

CO: Levis Strauss & Co.; Designs Inc. ST: California, Massachusetts IN: REA SU: JVN

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Publication:PR Newswire
Date:Nov 4, 1993

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