Heritage denim brand Levi’s has become a guiding light during the COVID-19 pandemic, working with its Red Tab Foundation to share a playbook on supporting current and former employees and sending messages of optimism. As an industry leader, Levi’s often sets the precedent for denim brands of all sizes.
Its latest strategy—tapping finance chief Harmit Singh to personally call big retailers with incomplete bills—presents a new formula for others to consider.
In a interview from The Wall Street Journal, Singh described his role as “chief debt officer,” and explained the reasons why liquidity is his top priority during the challenging times.
“I learned through the last four recessions…you should raise cash when you don’t need it,” he told WSJ. “I have learned that cash is always king.”
Levi’s total liquidity added up to nearly $1.8 billion last quarter. According to the report, it has enough money to stay afloat even if stores remained closed for another year. Still, it’s requesting even minimal payments every week from its customers, as 64 percent of 2019’s revenue came from sales to global retailers.
Singh told WSJ the call strategy is working, and noted that each region’s president and CFO touch base with their customers before they’re escalated to him. In some instances, CEO Chip Bergh will even make a call.
Coupled with the emphasis on liquidity, the company is extending its terms for paying suppliers in an effort to save cash and balance payables and receivables. It’s also removing planned capital expenditures, cutting down on discretionary spending, raising $500 million in funds and reducing new orders.
