American clothing brand, Levi Strauss & Co. has recorded a 9% rise in shares after the denim maker revealed its momentous online sales growth of 52%. This growth enables the firm to offset its losses incurred during the fiscal third quarter.
According to company officials, Levi Strauss would maintain this strong performance throughout the holiday quarter. However, they anticipate yearly sales to be down by 14% to 15%. Reportedly, Levi’s is planning to resume payouts by 2021, if the situation does not worsen any further. But for the fourth quarter, the company has decided to halt dividend payments.
Incidentally, third-quarter sales of the company fell by 27%, as it had to make some unplanned store closures during the pandemic. Additionally, the net income of the denim maker tumbled 78%.
Speaking on the recent development, Chip Bergh, CEO, Levi Strauss, said that the direct-to-consumer business model has proven to be a standout option for the company and has helped it gain prominent market share in the women’s apparel category. All-in-all this quarter was way better than its forecast. The company is delighted to see all its actions, the tough choices it had to make during the early stages of the epidemic, finally pay off, added Bergh.
Back in July, the firm had announced that it would be slashing nearly 15% of its overall corporate workforce, which could affect almost 700 jobs. Nonetheless, Levi's is now planning to diversify its business approach by taking part in new initiatives. Recently, Levi’s along with The RealReal and Gucci launched new initiatives to promote the habit of ethical fashion consumption.
Evidently, Levi's indents to introduce a new resale and buyback program to limit denim waste. This program would be branded as SecondHand.
Through SecondHand, the clothing company will enable customers to submit their used denim jackets and jeans in exchange for a gift coupon or card worth $15-$25 dollars, depending on the exchanged garment quality.