Levi Strauss & Co. said on Thursday it plans to close two sewing plants in Spain and lay off 453 workers as the struggling jeans maker looks to cut costs and reverse seven years of slumping sales. The San Francisco-based company said it has begun discussions with employee representatives about shuttering the plants in Bonmati and Olvega, which are expected to close their doors by the end of the third quarter.
"We have looked long and hard for alternative solutions, but we simply can't continue to bear manufacturing costs in Spain that are double those of our other plants in Eastern Europe," Domenico Trizio, senior director of manufacturing operations for Levi Strauss Europe, said in a statement.
The cuts would be on top of the elimination of 200 jobs and 74 open positions in North America that the company announced in April. Levi Strauss current workforce stands at about 10,500 employees.
The privately-held company, which reports earnings because of its outstanding bonds, also said it would continue to operate plants in Hungary, Poland, Turkey, South Africa, Australia and the Philippines.
The proposed shutdowns come as the legendary company has struggled to reverse seven straight years of sliding sales amid tough competition from more youth-oriented brands.
The company, which late last year hired an outside turnaround specialist to help revive its business, has closed factories and seen its credit rating slashed due to its lagging business performance and high debt load as it seeks to focus on marketing rather than manufacturing its products.
Last month, Levi Strauss also said it would explore selling its Dockers casual clothing brand as a way to concentrate on its traditional Levi's brand as well as the Levi Strauss Signature clothing line sold in discount retailers.
Source: Reuters
04.06.2004