Levi’s Q2 sales were particularly weak in the US, falling 19%.

US clothing maker Levi’s has suffered a massive 98% slump in profits for the second quarter 2008, citing the “difficult economic environment”. 

The company, best known for its fashionable jeans, reported profits of $1 million (£500,000), compared with $46m in 2007.

Levi’s blamed the uncertain economic environment, lower performance within its US Dockers business and difficulties experienced with its new software system for the huge decline.

Sales were particularly weak in the US, down 19% to $477m. In Europe and Asia Pacific, sales were up 10% to $268m and 6% to $191m respectively – however it wasn’t enough to lift the company’s profits.

According to John Anderson, Levi’s President and Chief Executive Officer, the company was expecting the second quarter to be tough. He said: “The retail environment in the US remained challenging. In addition, our transition to a new enterprise resource planning system in the US negatively affected our results.

“Increasingly difficult economic conditions in many markets worldwide are impacting consumer spending, but our brands remain strong. We are pleased with the continued strong growth of our emerging markets and our retail network around the world.”

Anderson added that he expects the rest of the year to be challenging, but said they “are taking decisive actions to position the company well for when market conditions improve.”

By Natasha Piscitelli