Levi’s Global Factory Footprint Pays Off as Vietnam Struggles

(Bloomberg) -- Levi Strauss & Co.’s strong quarter is sending a clear message to the rest of the apparel industry: There’s value in spreading out manufacturing.

Chief Executive Officer Chip Bergh said the denim maker sources less than 4% of its goods from Vietnam -- which has faced factory shutdowns recent due to Covid-19 outbreaks -- and tries not to have production concentrated in any particular country. That echoed comments from shoemaker Steve Madden Ltd., whose CEO, Edward Rosenfeld, also highlighted its diversified sourcing in a recent earnings call.

Read more: Levi’s outlook is rosier as quarterly sales top expectations

That contrasts with several U.S. retailers, including Nike Inc. and Abercrombie & Fitch Co., which have been sounding the alarm over Vietnam ahead of the all-important holiday season.

Apparel makers rose Thursday following Levi’s report. The jeans company itself surged as much as 11%, the biggest intraday gain in a year. As the earnings season gets underway, the coming weeks will likely reveal who made the right bets on where to make their stuff.

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