As coronavirus has been declared a global emergency by the World Health Organization, many companies have decided to shut their operations in China. Now the world’s leading apparel firm Levi Strauss & Co has shut almost half of its stores in China as a result of the novel coronavirus outbreak that has killed more than 200 people in the country so far, said Chief Financial Officer Harmit Singh on Thursday.
The announcement had come at a time when Levi’s had opened its largest store in China a few months back in the city of Wuhan, which is the epicenter of the coronavirus epidemic.
Harmit Singh said the decision to close the stores in China would certainly hit the growth objectives of the company in the near term. It is worth noting that China contributes approximately 3 percent of the company’s revenue.
The flu-like virus has posed a huge threat to many lives and ringed alarm bells all across the world, with many countries shutting operations and canceling scheduled visits to China. Earlier, Tesla and Starbucks have issued a warning of a financial hit as a result of the sluggish business in the world’s second-largest economy.
Meanwhile, taking further preventive measures, Levi’s has also stopped all its employees to travel in and out of China.
So far, mainland China has reported 9,816 cases and 213 deaths due to the new coronavirus.
According to reports, Levi’s forecast 2020 earnings more than the estimates as the demand for women’s apparel in its stores and online channel received a great boost. Levi’s has “hit the ground running” during the vital holiday shopping season, added Singh.
However, Levi’s had missed fourth-quarter revenue estimates as a result of falling sales at various stores and eruption of protests in Hong Kong.