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Levi CEO to Step Down This Year

The executive's tenure has been marked by layoffs and is ending amid talk of an IPO.

July 07, 2006|From the Associated Press

SAN FRANCISCO — Levi Strauss & Co. Chief Executive Phil Marineau will step down in November or December, concluding a reign marred by thousands of layoffs and accounting trouble before he ended a prolonged sales slide that ravaged the storied jeans maker.

Marineau's departure, announced Thursday, gives the tightknit family that controls Levi an opportunity to pick a new leader who can build on sales momentum and perhaps set the stage for an initial public stock offering to reduce a $2.2-billion debt load.

Levi has recently acknowledged that the company might go public again for the first time since 1985, but Marineau said Thursday that the possibility of an IPO had nothing to do with his decision to end his seven-year tenure as CEO.

"This just felt like the right time to do it," said Marineau, who will turn 60 in October. He hopes to leave just before Thanksgiving, when the company's fiscal year ends, but said he would remain through the end of the year if asked.

Levi Chairman Robert Haas, part of the family that descended from the founder of the 153-year-old company, said the board of directors would meet in two weeks to begin discussing the next CEO.

The candidates may include Levi executive John Anderson, who was promoted to president and chief operating officer Thursday. Anderson, 55, had been working closely with Marineau as head of Levi's Asia Pacific and global supply operations.

A former marketing wizard in the food and drink industries, Marineau brought an outsider's perspective when he arrived in 1999 to engineer what turned out to be a traumatic makeover.

"It was an extraordinarily challenging assignment," Marineau said. "I had people inside and outside the company who told me that it couldn't be done."

By the time Marineau took the job, Levi's annual sales had sagged 25% from their 1996 peak of $7.1 billion as younger consumers defected to trendier brands and older shoppers began buying less expensive clothes.

The erosion continued until last year, when Levi eked out a 1% sales increase, stabilizing the company's annual revenue at $4.1 billion. The company took another step backward as first-quarter sales this year sank 6%.

Levi has jettisoned half its workforce since Marineau took over, leaving the company with about 8,500 employees.

The cost cutting included the closure of Levi's remaining U.S. manufacturing plants as the San Francisco-based company joined other clothiers that shifted production overseas so they could cater to bargain-minded consumers.

Marineau earned $3.36 million last year, according to Securities and Exchange Commission documents. He becomes eligible for a $1.2-million annual pension from Levi once he turns 65.

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