Levi's is adding a new tag to its jeans, but it isn't red or orange. Levi Strauss has started putting RFID tags on many of its garments, and 40 retail outlets in Mexico are deploying RFID readers so they can use information encoded in the tags to track inventory and expedite check-out.

The fact that Levi Strauss allowed its name to be used in a press release issued by TAGSYS, the company that provided the readers, represents something of a breakthrough for the company. Though Levi's has been quietly investigating RFID for years, it has been tight-lipped about its plans, due mostly to concerns about how privacy-rights groups might react. In 2006, tests in two Mexican stores and one U.S. store prompted protests from privacy advocates. Levi's, however, has steadfastly maintained that the tags are there to track inventory—not people.

Grupo Hasar, systems integrator for the project and a TAGSYS partner, is handling the software integration into the back-end system and deploying the overall solution. The TAGSYS/Grupo Hasar deployment represents an expansion of Levi Strauss's RFID strategy to improve the customer purchasing experience by expediting the checkout process, especially during peak seasons, and helping store staff members answer customers' questions about what sizes and styles are available.

The TAGSYS reader combines leading ultra-high frequency (UHF) reader technology with a unique embedded antenna design that reliably inventories multiple stacked garments without erroneously reading tags on nearby items, which is a critical requirement in point-of-sale applications.

TAGSYS investors reacted to the Levi's news—as well as other company initiatives—by coming up with another $16 million for the Cambridge, Mass.-based firm. TAGSYS's Series C round of funding totaled $35 million, bringing total investor financing in the company to $80 million. Participants included J.P. Morgan, DFJ Esprit, Endeavour, and Saffron Hill Ventures.

The latest funding will allow the company to capitalize on the accelerated demand for item-level RFID systems in existing and breakthrough vertical markets.

"We see market demand in alignment with our vision of RFID as part of the network fabric with a universal infrastructure—all built on standards and with quality-of-service guarantees," says Elie Simon, president and CEO of TAGSYS. "This new infusion of capital will enable TAGSYS to continue broadening our product portfolio and respective patent position to accelerate our leadership position in the industry."