LEVI’S TO CUT 700 CORPORATE JOBS

Levi’s said Tuesday that it will cut 700 office jobs, or about 15 percent of its worldwide corporate workforce, as it deals with a sharp drop in sales due to the Coronavirus pandemic.

The San Francisco-based jeans maker said the layoffs will save it about $100 million a year and won’t affect workers at its stores or factories.

Levi Strauss & Co. said its second-quarter revenue sank 62 percent to $497.5 million. It reported a loss of $363.5 million, after reporting a profit a year ago.

Net revenues declined 62 percent on a reported basis; the decrease was due to the temporary closure of company-operated, franchise and wholesale customer retail locations as a result of the COVID-19 pandemic, partially offset by the company’s e-commerce business which grew 25 percent for the quarter, with sequential month-over-month acceleration to nearly 80 percent growth for the month of May.

“We started the year with strong momentum, but the global pandemic and economic crises had a significantly negative impact on our second-quarter results, as our stores and most wholesale doors were closed around the world for the majority of the quarter,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co. “I’m proud of how the team stepped up in response, accelerating our activation of key e-commerce and omnichannel capabilities, proactively cutting costs and managing cash smartly, and finding innovative ways to connect the Levi’s brand with its fans.”

Bergh continued, “the pandemic is accelerating retail landscape shifts and consumer behavior in ways that play to the strength of the Levi’s brand. And we are doubling down on our digital transformation, incorporating the power of AI and data science, and leveraging our iconic brands to have an even stronger focus on Gen Z and sustainability. We believe this will enable us to further grow our market leadership position and emerge from this crisis a stronger company.”

“It’s been an unprecedented quarter, and we have been swift and agile in responding to the impact of the pandemic on our business,” said Harmit Singh, executive vice president and chief financial officer of Levi Strauss & Co. “We are encouraged by early signs of recovery, as roughly 90 percent of our company-operated and franchisee doors have now reopened globally, with nearly 40 percent of our company-operated stores comping positive as we exited the month, which in combination with our cost and working capital actions resulted in positive cash flow generation in June.”