Levi' S Levi's Will Ease The Pressure If Production Is Withdrawn From China?

Only 1% of Levi's made in China.

In August 5, 2019, according to Reuters, Levi's CEO Chip Bergh said in an interview that Levi's Strauss&Co. has been moving its production out of China due to the uncertainty of tariffs on Chinese imports.

Levi's said that only 1% or 2% of Levi's products sold in the United States were made in China, and 16% this year ago, the proportion is decreasing.

For its reason, Levi's said recently that the United States used tariffs as a tool for terms of trade. Apart from clothing, the new tariff also involves consumer products such as electronic products and toys.

The tariff imposed by the United States on China's commodity tariffs has brought uncertainty to many US retailers.

16% of 2018's performance came from Asia.

Levi's, based in San Francisco, went public in 1971, raising about $50 million that year. It was one of the largest IPO in history. It then privatized the company in 1985 with a leverage acquisition of $1 billion 700 million.

In March this year, Levi's launched the listing again after 34 years. Data show that in the fourth quarter of 2018, Levi's's net income increased by 9% to $1 billion 590 million, but its profits dropped by 17% to $97 million.

2018 annual revenue grew by 14% to $5 billion 580 million and net income of $285 million. From the perspective of business distribution, 55% of the business is still in the Americas, 29% of sales come from Europe, and 16% from Asia.

Levi's withdrew from China 26 years ago.

In 1993, Levi's company withdrew from the Chinese market. According to the data, Levi's announced the end of its cooperation with the Chinese contractors in 1993.

At that time, Haas, chairman and chief executive of Levi's, a family holding company, called for an assessment of the human rights situation in 40 countries, and concluded that the human rights situation in China and Burma was serious.

However, in 2008, Levi's returned to China on the grounds that they were satisfied with the situation. Today, Levi's (Levis) brand jeans have been produced in large quantities in China.

However, it later regretted its decision to withdraw from the Chinese market.

Berg wrote in his book that Levi's had almost immediately regretted the decision to withdraw from the Chinese market, so they never really broke the link with the Chinese market after they withdrew.

Today, Levi's has two factories in Poland and South Africa, but most of them use third party suppliers in 22 different countries.

Levi's has shifted the supply chain from China to Vietnam and Bangladesh. They expect to increase the cost of consumers and have an impact on the entire retail industry.

Levi's has made contingency plans for this, not only for China but also for Mexico, so as to prevent the North American Free Trade Agreement from being broken.

American apparel retailers such as Gap, footwear and accessories brand SteveMadden and department store Macy 's have also taken action to move their production out of China.

However, according to the American Apparel and Footwear Association, China is still the largest supplier in the industry, and 42% of the clothing sold in the United States and 69% of the footwear are made in China.