Levi’s to leave US behind

YOU heard it through the grapevine ... iconic clothing firm Levi Strauss has finally shrunk out of the US, with the closure of its last American plants.

The California Gold Rush outfitter whose blue jeans are a globally recognised symbol of America, closed its last two US sewing plants on Thursday.

Levi’s, whose iconic TV advert featured Nick Kamen stripping off to his underwear in a launderette to the sound of Marvin Gaye’s I Heard it Through the Grapevine, let go of 800 workers at the 26-year-old San Antonio plants.

The financially-troubled company, based in San Francisco and in production since 1870, has been shifting production to overseas contractors for years to offset drooping sales in the ultra-competitive market. Only two decades ago, it had 63 US manufacturing plants.

Fashion has swung away from Levi’s traditional style of jeans, and repeated attempts to reinvent its image have fallen flat.

At the same time, it has been slow to follow the contract-manufacturing trend set by rivals such as Nike during the 1980s and 1990s.

Levi Strauss spokesman Jeff Beckman said the 150-year-old company was making an unavoidable business decision.

“We tried to do our best to maintain manufacturing in the US, but we have to be competitive to survive as a company,” he said.

Once, more than four million pairs of jeans were made there each year by workers earning an average of $10 to $12 per hour.

This spring Levi’s will close its three remaining company-owned plants in Canada, completing the shift to contract production in China and other countries with far cheaper labour.

Levi Strauss, which is privately held, has weathered seven straight years of declining sales after its revenue peak of $7.1 billion in 1996.

In 2002, the company reported sales of $4.1 billion, and Beckman said the yet-to-be-released number for 2003 would be 2-3% below that.

The company has seen its global workforce cut from more than 37,000 in 1996 to about 12,000 as of last month, roughly half of them in the US.

Along with the San Francisco headquarters, Levi’s will continue to base its design and sales staffs in the US, along with some distribution centres.

“We’re still an American brand, but we’re also a brand and a company whose products have been adopted by consumers around the world,” Beckman said. “We have to operate as a global company.”