Jeans maker Levi Strauss has reported a 16 per cent drop in quarterly earnings amid weak retail conditions in the United States and Japan and said it is in talks with unions about closing US and European factories.
The privately held company, one of the world's largest apparel makers, said net income for the quarter ended November 25th fell to $62.9 million from $75.4 million a year ago.
The clothing maker, which is based in San Francisco, has been hit especially hard in Japan where a number of the company's top retailers have gone bust in the midst of an economic downturn.
The only bright spot was in Europe, where sales rose 7.9 percent to $309.8 million.
The company operates seven plants in Europe and is planning to close two "high cost" facilities in Scotland, while the number of factory closings in the United States has not yet been determined, the Levi statement said.
Levi said it will focus on delivering relevant products, improving operational capabilities and enhancing retail relationships, in an effort to revive sales and earnings growth.
As an example of early progress in its turnaround, Levi has cited the worldwide success of its "Superlow" stretch jeans for women as an indicator of how the company needs to find the right product and then back it with strong marketing.