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7 Levi's Plants to Be Shuttered During Holidays

November 06, 1998|From Associated Press

Levi Strauss & Co., struggling to compete in an expanded jeans market, said it will temporarily close seven factories during the holiday season.

More than 4,000 workers will be asked to stay home in December and January in Texas, Georgia, Tennessee and North Carolina, the San Francisco-based company said Thursday.

The factories, in McAllen, San Benito, Brownsville and Wichita Falls, Texas; Valdosta, Ga.; Mountain City, Tenn.; and Murphy, N.C., make the basic Levi's five-pocket jeans.

Demand for Levi's trademark jeans has dropped in recent years. Competition from newer fashion brands, such as Gap and Tommy Hilfiger, has cut the world's oldest denim maker's hold on the jeans market to less than 17%.

The plants are scheduled to reopen in February. Until then, workers will receive 90% of their pay through unemployment, supplementary compensation, vacation and holiday pay, the company said.

Closely held Levi Strauss, the world's largest brand-name clothing maker, celebrated its 125th anniversary this year. Until recent years, Levi's dominated the jeans market with its famous 501 jeans and its Dockers and Slates brands.

But last year, worldwide revenue fell to $6.9 billion after peaking in 1996 at $7.1 billion.

The company said late last year that it would lay off 7,400 workers, about 34% of its North American work force, and close 11 of its 27 U.S. plants to compensate for lower demand.

In July, Levi Strauss said it would probably cut still more jobs during the next two years in an effort to trim $200 million in costs, but it did not provide any specifics.

Since then, the company has said two finishing centers--where workers wash, rinse, dye and press garments--in El Paso and Amarillo, Texas, will close by year's end.

Levi Strauss also has said it will close four European factories--three in Belgium and one in France. That announcement triggered angry protests in Belgium.

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