Levi's profit plunges 98 per cent as young shun its jeans

Levi Strauss's second-quarter net income plunged 98 per cent because of weak sales of Dockers and Levi's. The company – which began making its famous jeans in San Francisco in 1853 and which is one of the world's largest brand names in clothing – is considering moving its headquarters and all 1,000 employees across the Bay Bridge to Oakland to save money.

Levi Strauss is not the only clothing company in dire financial trouble. Steve & Barry's, the fast growing discount fashion retailer which is much loved by Sarah Jessica Parker, is expected to file for bankruptcy protection.

The collapse of Steve & Barry's will send shock waves through struggling shopping malls across America, which pumped hundreds of millions of dollars into luring the company into cavernous, empty spaces, some as large as 100,000 sq ft. All of those 275 shops may now close and the company's 16,000 employees are expected to be sacked. Anticipating a Chapter 11 bankruptcy proceeding, some vendors have halted shipments to the company.

Levi, which has a presence in more than 110 countries, has suffered through several years of declining sales as younger consumers gravitate to new brands. Wal-Mart's decision to cut back on Levi's inventory as it tries to shore up its own declining sales has also hurt.

The company reported revenue of $936m to 25 May, with $1.001bn in the year-earlier quarter. There were revenue increases in Europe and Asia Pacific but they only partly offset weak US sales. Net income fell from $46m to $1m.

In a conference call with reporters, Levi officials blamed computer software for causing a temporary block on orders being shipped to retail customers for a week. A number of retail customers have also cancelled orders, the officials said.

Levi's chief executive, John Anderson, expects US economic conditions to remain tough in the second quarter. Levi expects the rest of the year to be challenging, he said, "given the slowing macroeconomic indicators we are seeing globally."

Sales of the iconic brand topped out at $7.1bn in 1996, after which Levi went through an eight-year sales slide. The company is privately owned but has publicly traded bonds and therefore reports its earnings.

Mr Anderson took over in 2006 and has promised to make Levi more competitive and responsive to fashion trends.

Start your day with The Independent, sign up for daily news emails
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Arts and Entertainment
Paul Walker and Vin Diesel in Fast and Furious 5
film
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss