LEVI STRAUSS & CO, the San Francisco jeans giant, is to close 11 of its 22 North American manufacturing plants and lay off about 5,900 staff following poor results.
The company said the closures were part of a series of strategic steps by its American division to improve its competitiveness by moving its manufacturing operations overseas, where labour costs are lower. The move comes a week after Levi, which also owns the Dockers brand of clothing, reported a 13 per cent slump in sales from $6.9bn to $6bn last year, largely as a result of weak sales of jeans.
It said shifting manufacturing out of the US and Canada would lead to greater flexibility and lower costs. "These steps are crucial if we are to remain competitive," said John Ermatinger, president of Levis Strauss in the Americas.