Levi Strauss & Co. (San Francisco) has hired a turnaround consultant and said good-bye to its cfo of the past five years as the jeans maker tries to deal with its current dire straits.
Without providing a reason for the change, Levi's said that Bill Chiasson had left the company. It also announced the hiring of Alvarez & Marsal, a New York-based consultant that has counseled dozens of struggling companies. Tony Alvarez, the turnaround firm's co-founder, recently revamped The Warnaco Group (New York), the maker of Calvin Klein jeans and other apparel. He became Warnaco's ceo after the company went bankrupt in 2001 and left the company after it emerged from bankruptcy earlier this year. At Levi's, Alvarez will be an adviser to ceo Phil Marineau.
Levi's named Jim Fogarty, a managing director for Alvarez & Marsal, as its interim cfo, replacing Chiasson. Fogarty was Warnaco's cfo during its bankruptcy.
The shake-up comes amid a seven-year sales slump at Levi's as the company battles to improve its tarnished credit rating and deal with questions about its accounting practices.
Privately held Levi's warned last month that its sales for its fiscal year ending in late November will fall below expectations, resulting in revenue of about $4 billion, down from a peak of $7.1 billion in 1996.
In addition, the company's credit rating has sunk amid worries that it will become tougher to repay its debt if sales don't improve soon. And Levi's suffered another black eye in October when the company disclosed an error on its 1998 and 1999 tax returns would wipe out $30.9 million in previously reported profits. The company's accounting practices also are under fire as part of a lawsuit filed by two former tax managers who allege Levi's falsified financial statements dating back to 1997.
Levi's chairman Robert Haas gave Marineau a vote of confidence in a statement Monday, saying the ceo has taken “many significant steps to improve the company.” Hiring Alvarez & Marsal “will provide our leaders with additional perspectives,” Haas said.
Marineau, a former PepsiCo executive, was hired in 1999 to give the company an outsider's perspective. He is one of the first people outside the Levi Strauss family to run the 150-year-old company.