Simon Spence, a senior consultant at Perot Systems who works with clients preparing to do business with Wal-Mart, says businesses benefit technologically from the demands Wal-Mart puts on them as their biggest customer. "Wal-Mart is a great catalyst for them to invest more money than they would previously to stay in business," he says. "That's the way you grow. That's the way you survive. It drives you to work toward becoming a global company."

The First Signs of Turnaround

It wasn't until Levi's had a better window into its business that it was confident enough to do business with Wal-Mart. In May 2002, Hammann and Bergen sat down with a 25-person team for a daylong meeting in San Francisco. "We asked, Is this something we can do?" says Hammann. The team, composed of managers from all parts of Levi's business, had covered its bases on the project, Bergen says, considering all "people changes, process changes and technology changes."

By September 2002, the group decided to go forward. Hammann is confident. "We went from a company that couldn't shoot straight to where we're very capable of ready, aim, fire," he says.

Wal-Mart's Mikita says she is impressed with the level of detail Levi's "has dug into to make the execution of this new launch 100 percent."

And today, there are encouraging signs Levi's is turning around. Sales for the company's third and fourth quarters grew for the first time since 1996. During the spring and fall of 2002, Levi's started popping up on NPD Fashionworld's top 10 list of brands preferred by young women for the first time in recent memory. "It hadn't been close to that for a while," says Cohen. "Teens hadn't gravitated toward Levi's in years. That was incredible. A lot of that has to do with having the right style in the right place at the right time." Cohen says Levi's plans to upgrade its business processes, and its improved replenishment system has helped the company get the right sizes to the right stores. The question is, Will they be able to sustain it?