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Robert Haas: New Turbulence In The Jean Pool

In Business This Week: HEADLINER


Robert Haas's ongoing efforts to get Levi Strauss back on track apparently haven't paid off. On Sept. 28, the San Francisco-based jeans giant said that it would shut down two plants in Texas, resulting in a loss of nearly 1,000 jobs. A day later, Levi's announced cuts of almost 1,500 jobs with the shuttering of four factories in Belgium and France--a painful step for Haas, the chairman and CEO who has long espoused progressive, employee-friendly policies. Levi's says the moves were sparked by sluggish demand for its jeans.

Analysts say the slowdown can be blamed on a combination of increased competition, economic turmoil, and Levi's inability to keep up with fashion trends.

What's more, they say the $7 billion jeans maker has allowed competitors such as Gap, J.C. Penney, and Sears to steal away the most crucial buyers--teens. "Levi's is an item of utility," says retail analyst Kurt Barnard. "Today's kids want more than that." Levi's latest moves, analysts say, will do little to help the company regain its former dominance.EDITED BY KELLEY HOLLANDReturn to top


ONLY FIVE YEARS AGO, when airlines were bleeding red ink, American Airlines parent AMR envisioned a day when it might be out of the airline business. How times have changed. Under new Chief Executive Donald Carty, who took the top job in May, a profitable AMR is selling three nonairline businesses "to better focus on its core airline and related technology units." Carty says he expects to have deals by yearend at "a good price." The three businesses, with annual revenues of about $451 million and operating profits of $40 million, offer such services as passenger and cargo handling and telemarketing. Carty says the units are "nonstrategic." But he says AMR has no immediate plans to change its 82% ownership in the Sabre computer-reservations unit.EDITED BY KELLEY HOLLANDReturn to top


RUSSIA IS NOT EXACTLY SMOKING FOR RJR NABISCO. Economic upheaval there will damage the tobacco giant's third-quarter earnings, the company said Sept. 29. Earlier in September, RJR suspended operations for two weeks at its St. Petersburg plant because of weak sales. RJR's top cigarette in Russia--Peter I, named after the Russian czar--lags two brands from industry leader Philip Morris. The good news: Despite Russia, RJR will be profitable for the third quarter, after being in the red for the first half of 1998.EDITED BY KELLEY HOLLANDReturn to top


ONE YEAR AGO, MICROSOFT CHAIRMAN BILL GATES said his Web browser would overtake NEtscape Communications' market-leading product within a year. He nailed it. According to International Data Corp., Microsoft's market share in the first half of this year rose to 43.8%--compared with 41.5% for Netscape. Netscape still holds strong leads in business markets. "The home market is where Microsoft's illegal bundling tactics have made the most impact," says Netscape Senior Vice-President Bob Lisbonne. A Microsoft spokesman says consumers are simply choosing a superior product.EDITED BY KELLEY HOLLANDReturn to top

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