Levi's profits slump 98% to $1m

Levi is struggling to revive US sales

US clothing maker Levi Strauss has seen profits dive as a result of weak consumer spending and costly new software which disrupted supplies.

The company, famous worldwide for its jeans, said second quarter net profits were down 98% on last year to $1m.

The group blamed the weak economy and costs related to rolling out new business software that caused shipping delays and dented US sales.

It also said European and Asian consumers had been hit by rising costs.

We're getting no help from the economy in any of our markets around the world John Anderson, Levi Strauss chief executive

Levi said the results ended two years of healthy profit gains.

The company is struggling to boost sales in the face of falling consumer spending in major global markets, including the US, and it said the rest of the year would be challenging.

Consumer gloom

Levi's problems were not confined to the US.

Consumers had cut back on spending as prices for food and fuel increased in European and Asian markets too, the company said.

"We're getting no help from the economy in any of our markets around the world," said chief executive John Anderson.

Others factors that dragged profits down was Levi's retail expansion and poor sales at its casual trouser business Dockers.

The firm owns and operates 48 US stores and is looking for new locations.

Global sales fell 8% to $936m in the quarter and US sales dropped 19%.

Analysts said the next quarter would be key as the company traditionally does well when children go back to school.