Shares of several denim makers fell Wednesday as investors worried that the industry may have gone the way of Levi Strauss & Co., which reported a disappointing quarter late Tuesday.
Levi's second-quarter profit fell 38 percent due to the drag of a sluggish economy, higher cotton prices and a stronger dollar. The clothing company said that in the March-May period, its revenue fell in Europe, where many countries are in recession or on the brink of one. It was also the first time in two years that the privately held company's sales in Asia declined.
Economic pressures on consumers across the globe are getting worse, said Levi's CEO Chip Bergh.
Levi's and other clothing companies have struggled for some time with the impact of the tough economy on consumer shopping habits. The industry also has dealt with the rising cost of cotton for more than a year. Companies have raised prices and lowered other expenses to offset those pressures, which haven't always covered those costs.
Other declining denim makers included Guess Inc. and True Religion Apparel Inc., whose shares both fell more than 6 percent in late afternoon trading. Gap Inc. and V.F. Corp., which sell jeans as well as other clothing, were down nearly 2 percent.
