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Levi Strauss to Outsource Finance Unit

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Levi Strauss & Co. store inside the Manufaktura shopping mall in Lodz, Poland

July 13,2015

Finance operations are fading away at Levi Strauss & Co.

The closely-held apparel maker is in the process of outsourcing its finance function, as part of a larger initiative to pare down costs. The plan calls for shifting several of operations such as human resources, IT and customer service to a third-party, the company said in a conference call with analysts last week.

The move is the last part of Levi Strauss’ global productivity initiative, announced last year and designed to shave $175 million to $200 million annually from the company’s expenses. During the conference call, finance chief Harmit Singh admitted to a delay in cutting the last $50 million costs, calling the outsourcing “the tough piece of” the plan.

“And from our perspective, doing it right is more important than speed, because we want to institutionalize it,” Mr. Singh told analysts. “So it’s just taking a little longer.”

Executives did not elaborate on its outsourcing plans. The company previously said that Wipro Ltd.507685.BY +0.67%, a Banglore, India consulting firm would provide some of the outsourced functions under a five-year agreement, expected to cost $143 million. Wipro offers IT, analytics and other business processing-related services.

San Francisco-based Levi Strauss reported a 6% drop in revenue in its latest quarter, struggling with the effects of a stronger dollar in foreign markets. Still, Levi Strauss posted a $12 million profit for its second fiscal quarter ended May 31.

 

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