Levi Strauss & Co. will close its last manufacturing plants in the United States and Canada, eliminating nearly 2,000 jobs, the struggling jeans maker said Thursday.
Levi will close two sewing and finishing plants in San Antonio by year's end and lay off 800 workers and shutter its three remaining manufacturing plants in Canada that employ 1,180 people by March. The company will contract with foreign manufacturing plants.
The move will allow the company to focus on product design, marketing and sales of its jeans, said Julie Klee, general manager of Levi Strauss & Co. (Canada) Inc.
"The closures are an absolutely necessary part of ensuring the long-term competitiveness of our business," Klee said. "Moving away from owned-and-operated manufacturing to a broader sourcing base will strengthen our business by giving us much more flexibility."
The Canadian plants affected are sewing operations in Edmonton, Alberta, and Stoney Creek, Ontario, and a finishing center in Brantford, Ontario, the company said.
In 2002, Levi's U.S.-based parent company closed six U.S. manufacturing plants, eliminating 3,600 jobs.
San Francisco-based Levi Strauss, which just turned 150 years old, became one of America's iconic brands in the 1950s and '60s, as its jeans became a wardrobe staple of baby boomers.
The company, however, has struggled in recent years to connect with younger consumers. Sales peaked at $7.1 billion in 1996 but have fallen for six straight years to $4.1 billion and got off to a slow start this year as consumers began buying more trendy or less expensive clothes.
In an effort to bounce back, Levi's has designed more clothes to appeal to teenagers and young adults, and cut costs to lower prices. The company also entered the discount jeans market earlier this summer with a new brand called Signature that is sold in Wal-Mart stores.
Levi plants once dotted South Texas from San Angelo to the Rio Grande Valley. But for years Levi Strauss and other clothing makers have been shutting down U.S. plants and moving production to other countries with cheaper labor.
The Canadian subsidiary said it will offer a comprehensive separation package to those losing their jobs, with a $700,000 transition fund set by the Levi Strauss Foundation to help the three communities where the plants being closed are located.