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Kai Ryssdal: After nearly a solid decade of saggy performance, Levi Strauss is looking a lot more fit. Sales are up. This week, the company announced a 14 percent bump in second-quarter profits. And the good news has sparked speculation the jeans maker could soon be in a position to go public again. That’s after more than 20 years as a private company.
Elizabeth Wynne Johnson goes behind the seams.
Elizabeth Wynne Johnson: For years, the words “Levi’s” and “turnaround” have gone together like, well, jeans and t-shirts. The privately-held company has restructured, trimmed its U.S. workforce and moved manufacturing overseas.
Scott Tuhy is an analyst at Moody’s. He says the company has branched out from its iconic Button Fly 501 jean. But it hasn’t left its rugged image behind.
Scott Tuhy: The key element has been the focus they have on the brand and keeping the message strong with the consumer.
The company’s boosted revenue by selling in trendy stores like Urban Outfitters. But sales of Levi’s “Signature” brand are down. That’s the lower-priced line sold at discount retailers Target and Wal-Mart.
Tuhy says Levi’s sell well in the booming Asian market. And a weak dollar has helped drive sales in Europe.
Tuhy: While we think of Levi as an American icon, you know, nearly 50 percent of its sales are actually outside United States. And actually outside the United States, they historically earn higher margins on their product given, you know, a more premium positioning for the product there.
The company’s got a new CEO and it’s been cutting its debt load. Now the market’s buzzing with rumors about a possible IPO. A company spokesman says for now, Levi will stay focused on boosting cash flow and further whittling down that debt.
In Los Angeles, I’m Elizabeth Wynne Johnson for Marketplace.
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