- Levi's is slashing 700 jobs totaling 15% of its workforce in response to plummeting sales during the coronavirus outbreak.
- The cuts come just one day after Lucky Brand announced it will permanently shutter 13 stores after filing for Chapter 11 bankruptcy protection last week.
- "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," Levi's CEO Chip Bergh said in a press statement on Tuesday.
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Levi's is slashing 700 jobs — a total of 15% of the San Francisco-based denim company's workforce — in response to plunging sales during the coronavirus outbreak.
In an announcement on Tuesday, Levi's CEO Chip Bergh said the cuts will include "non-retail, non-manufacturing" jobs and will allow the company "to become a leader and more market-responsive organization."The downsizing comes alongside poor sales for the denim company due to temporarily shuttered stores, including a net revenue drop of 62% and a net loss of $364 million.
"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," Bergh said in a press statement.
While most apparel companies are struggling with virus-related sales woes, denim retailers have been hit especially hard as homebound Americans swap out "hard pants" for the comfort of athleisure. The Levi's cuts come just one day after Lucky Brand announced it will immediately shutter 13 of its 200 stores after filing for Chapter 11 bankruptcy protection on Friday.
"The COVID-19 pandemic has severely impacted sales across all channels," Matthew A. Kaness, Lucky Brand interim CEO and executive chairman, said in a press statement on Monday. "While we are optimistic about the reopening of stores and our customers' return, the business has yet to recover fully. We have made many difficult decisions to preserve the company's viability during these unprecedented times."
For Levi's, the company plans to continue to focus on digital growth and engaging with younger consumers like Gen Z, a demographic that Levi's recently experimented with in a series of TikTok campaigns to early success.
"The pandemic is accelerating retail landscape shifts and consumer behavior in ways that play to the strength of the Levi's brand," Bergh said. "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."
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