In Business This Week: Headliner
Robert D. Haas: Jean Therapy
Levi Strauss has a bad case of the blues. On Feb. 22, the company announced plans to cut 30% of the 19,900 workers it employs in the U.S. and Canada and shut half its factories. The jobs will move overseas. Levi's pays U.S. textile workers more than $9 an hour with benefits. But with revenues off 13% in '98, the company says it can't afford that. The move means that Levi's, long famous for its social responsibility, is abandoning 150 years of mostly domestic production.
Chief Executive Robert Haas, who spent the days after the announcement talking with displaced workers, wasn't available for comment. The company is setting aside $245 million for severance payments, and Haas's Levi Strauss Foundation will add $5 million to the $8 million community-aid fund begun when Levi's slashed 6,395 jobs last year. At this rate, the total job loss from 1997 to the end of 1999 will be 12,000. "This country is over-denimed, and Levi's doesn't have the heat of a Calvin Klein," says J'Amy Owens of The Retail Group.EDITED BY KELLEY HOLLANDReturn to top
Annunziata Hangs Up on AT&T
ONCE AN ENTREPRENEUR, ALWAYS AN ENTREPRENEUR? Robert Annunziata, head of AT&T's $22 billion corporate business, is leaving to become CEO of Global Crossing, a 2-year-old firm that is stringing fiber-optic cables across the world's oceans. Just a year ago, Annunziata agreed to sell his upstart Teleport Communications Group to AT&T for $12 billion. AT&T Chairman and CEO Michael Armstrong promoted Annunziata to the key management position, hoping that his entrepreneurial zeal would shake up bureaucratic AT&T. At Global Crossing, Annunziata will replace John Scanlon, who will become vice-chairman. Michael Keith, a 21-year AT&T veteran, was named to replace Annunziata.EDITED BY KELLEY HOLLANDReturn to top
Barnes & Noble vs. Barnes & Noble
FEB. 23 WAS A GOOD NEWS/BAD NEWS DAY FOR BARNES & NOBLE--but the bad news dominated, and the book retailer's stock fell 13%. Barnesandnoble.com sales, at $70 million for the year ended Jan. 30, 1999, surpassed expectations. But rising Web sales are dampening growth for its brick-and-mortar business. Same-store sales growth in 1999 will be lower than anticipated, says analyst Danielle Turnof Fox at J.P. Morgan Securities, and the company is opening fewer new superstores. Says Turnof Fox: "They are doing the right things, but there are negative consequences."EDITED BY KELLEY HOLLANDReturn to top
A Graveyard Shift for the NYSE?
GOT NO DOZ? THE NEW YORK STOCK EXCHANGE MAY SHARPLY EXTEND ITS HOURS. In a Feb. 23 speech, Chairman Richard Grasso said the exchange may supplement its current 9:30 a.m.-4 p.m. hours with a 5 a.m.-9 a.m. session for non-U.S. stocks, starting in June, 2000. Eventually, after-hours trading could continue as late as midnight and include some U.S. stocks. "The growth in global investing will not allow markets to be competitive if they constrain themselves to a time clock," Grasso said. But it might be hard to convince brokers--who in 1991 defeated a proposal to expand trading by just 30 minutes.EDITED BY KELLEY HOLLANDReturn to top