Levis are not wearing so well

But while jeans today are more popular than ever, the manufacturer that made them famous, Levis Strauss and Co, is experiencing its toughest time in its 150-year history and has taken drastic steps to try to reverse its dwindling fortunes.

The company is to close its North American plants and cut nearly 2,000 jobs, a move that completes its long exit from the US manufacturing business that began more than 20 years ago.

The job cuts and plant closures are part of the latest restructuring at the privately held firm, which has seen profits nosedive as both cheaper discount brands and pricey designer labels cut deeply into its market share.

The American icon says it has been forced to move its production overseas to remain competitive.

The company that introduced jeans to the world and watched the transformation from basic work apparel of the wild west to a fashion fixture, has fallen on hard times.

Earlier this month the company announced plans to cut 650 jobs and seek waivers from its lenders, while it sought new financing. It is trying to compete with lower-price clothing makers and, like many firms, has found it much cheaper to send its production overseas.

A Levi Strauss spokesman stressed that the remaining US sewing and finishing plant about to close represents less than 5 per cent of the products it sells in the US today. "We’re in a highly competitive industry where few apparel brands own and operate manufacturing facilities in North America," the chief executive officer, Phil Marineau, said yesterday.

"In order to remain competitive, we need to focus our resources on product design and development, sales and marketing and our retail customer relationships."

The Levi empire was built on the simplest innovation - a riveted pocket - made by a tailor from Reno, Nevada, called Jacob Davis. Davis was asked to make a pair of pants with reinforced pockets. He happened to have some rivets in his workroom and hammered one into the pocket.

It worked so well, he was soon inundated with orders and realised he should patent the idea, but lacked the money to do so. He wrote to Levi Strauss, a dry goods wholesaler who supplied his fabric, and suggested they go into business together. Strauss jumped at the idea and started manufacturing jeans in 1873.

Levi’s used the same indigo fabric in their early jeans that they use today and the design was remarkably similar, right down to the oilcloth tab with its distinctive red writing, which was introduced in 1892 and remains integral to Levis to this day.

As their popularity grew, Levis were no longer just for men and boys. Women, too, were wearing them. Lady Levi’s appeared in 1938.

Yet despite its everyman appeal, the past ten years have been testing times for the denim manufacturer. In the 1990s Levis watched its products slide in popularity in the face of an army of combats, chinos and tracksuits.

Those who continued to wear Levis, like Jeremy Clarkson, the TV presenter, and Rick Parfitt of Status Quo, could not be termed high priests of fashion.

For all their illustrious 200-year history, Levis were looking old.

In 1998, the number of men’s jeans sold in the UK dropped by 11 per cent. After the millennium denim started to reappear on the catwalk, at the same time as jeans companies repositioned themselves to appeal to a younger market.

LEJs, Levi’s Engineered Jeans, kickstarted interest again in the market. May saw the 150th anniversary of the founding of Levi Strauss: the company trumpeted the iconic quality of its product as worn over the past century by cowboys, Hollywood stars, and rebellious youth.

Lurking in the background is the economic reality that sales of Levi Strauss have fallen from a dizzying peak of 4.4 billion in 1996 to just over 2.4 billion in 2002.

But while industry analysts say the company has lost its edge, despite its economic woes, Levi Strauss says it will be around for ever.