Levi Strauss & Co. swung to a loss during its fiscal second quarter on a 3% sales drop as executives brushed off the chance of an initial public offering of stock.
While other retailers are consolidating in the ailing economy, San Francisco-based Levi's said it is expanding its footprint.
"Retail continues to be an important part of our growth strategy," said Robert Hanson, president of Levi Strauss Americas. "It really allows us to showcase our product offering."
This week, Levi's completed the purchase of 73 Levi's and Dockers outlets for $72 million from Anchor Blue Retail Group Inc. Levi's also opened more than 30 new stores world-wide during the quarter, in part by taking advantage of other casualties of the recession, including the closure of small, individual stores.However, company executives dismissed the likelihood of a near-term IPO. Levi's recently hired Blake Jorgensen, a former chief financial officer of Yahoo Inc., as its financial chief, fueling speculation of a public offering for the closely held company.
"I do have some of that experience in my background, but I think more important, I saw this as an incredible brand and a unique opportunity," Mr. Jorgensen said in a telephone interview. He declined to comment further.
When asked if he would say Mr. Jorgensen's hiring increased the possibility of an IPO, Chief Executive John Anderson replied, "I would not."
Levi's reported a net loss of $4.13 million for the quarter ended May 31, compared with $701,000 in net income a year earlier. Revenue fell 3.4% to $904.5 million. Levi's attributed the revenue decline to currency-exchange rates. On a constant-currency basis, the company said net revenue increased 5% for the quarter.
The Americas was the strongest region for the company, with revenue up 8% to $518 million despite adverse currency effects. Europe and Asia Pacific revenues declined 17% and 13%, respectively. Asian sales were hurt by slowing wholesale orders in Japan.
Mr. Anderson said the company is seeing slim fits and skinny jeans as among its strongest sellers world-wide. The two most popular washes are very dark or the distressed-look.
