Jeans maker Levi Strauss said today it would close six US manufacturing plants and cut 20 per cent of its worldwide staff as it shifts its focus from manufacturing to marketing.
The 150-year-old company, whose name was once synonymous with jeans, is attempting to restore its faded image in the face of competition from other brands that have cut into a once-dominant market share.
About 3,300 employees will be laid off as a result of the closures.
Contracting to outside manufacturers will enable the company to have a more flexible cost structure, protect its profit margins, and invest more in product development, marketing and retailing, the company said.
Levi Strauss last month reported higher quarterly earnings boosted by lower interest costs and foreign exchange gains, but sales continued a five-year decline.
The privately held company, one of the world's largest apparel makers, said it would stabilise sales by the end of the fiscal year and see its business grow during 2003.
In particular, the company is pushing fits and styles that appeal to younger consumers, such as Superlow stretch jeans for women and low-rise jeans for men.