8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event Reported): September 11, 2003

LEVI STRAUSS & CO.

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation) 333-36234 (Commission File Number) 94-0905160 (I.R.S. Employer Identification No.)

1155 BATTERY STREET

SAN FRANCISCO, CALIFORNIA 94111

(Addresses, including zip code, and telephone numbers, including

area code, of principal executive offices)

(415) 501-6000

(Registrant’s telephone number, including area code)

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

99.1	Press release of Moody’s Investors Service dated September 11, 2003.
99.2	Press release of Fitch Ratings dated September 12, 2003.

ITEM 9. REGULATION FD DISCLOSURE

On September 11, 2003, Moody’s Investors Service (“Moody’s”) issued a press release regarding its decision to place our ratings on review for possible downgrade. Attached hereto as Exhibit 99.1 is a copy of the Moody’s press release dated September 11, 2003 titled “Moody’s Investors Service Places the Ratings of Levi Strauss & Co. Under Review For Possible Downgrade.”

On September 12, 2003, Fitch Ratings (“Fitch”) issued a press release affirming a “B” rating on our $1.7 billion senior unsecured debt. In addition, Fitch stated that our proposed $650 million asset-based loan due 2007 is expected to be rated by Fitch at “BB” and our proposed $500 million term loan due 2009 is expected to be rated by Fitch at “BB-.” Upon closing of our new bank credit facility, the “BB-” ratings on our $375 million revolver and $368 million term loan will be withdrawn and the new bank facility ratings will become effective. Attached hereto as Exhibit 99.2 is a copy of Fitch’s press release dated September 12, 2003 titled “Fitch Affirms Levi Strauss At “B” – Rates Proposed ABL/Term Loan “BB/BB-.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		LEVI STRAUSS & CO.
DATE:	September 15, 2003	By:	/s/    WILLIAM B. CHIASSON
		Name:	William B. Chiasson
		Title:	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release of Moody’s Investors Service dated September 11, 2003.
99.2	Press release of Fitch Ratings dated September 12, 2003.

EX-99.1

EXHIBIT 99.1

MOODY’S INVESTORS SERVICE PLACES THE RATINGS OF LEVI STRAUSS & CO. UNDER REVIEW FOR POSSIBLE DOWNGRADE.

11 September 2003

Moody’s Investor Service Press Release

Moody’s Investors Service placed the ratings of Levi Strauss & Co. (“LS&Co”) on review for possible downgrade. The review was prompted by LS&Co’s announcement today wherein the company stated it could not be certain it would be in compliance with all of its financial covenants as set forth in their existing credit facility dated January 2003, and that it would seek a temporary waiver until it could execute a refinancing of their credit agreement. The company also stated that it would incur significant restructuring charges as part of a cost cutting initiative with the hope of realizing significant savings in 2004 and beyond.

The review for possible downgrade reflects Moody’s concerns about the rapid decline in the company’s financial flexibility vis a vis its recently executed credit agreement, and weaker than anticipated year to date results than expected by Moody’s at the time of the rating assignments, particularly in the areas of sales, higher working capital needs and higher debt levels. On July 3, 2003 the rating agency issued a press release assigning a negative outlook to the company’s ratings. At that time, Moody’s stated that an inability by LS&Co to stabilize business trends and improve debt servicing ability in the near term could lead to a ratings decline.

The affected ratings include:

Senior implied rating of B2;

$750 million senior secured bank facilities rated B1;

Approximately $1.6 billion of senior unsecured notes maturing through 2012 at B3;

Senior unsecured issuer rating of B3.

The rating review will focus on perceived negative price and volume pressure in the LS&Co’s core products which comprise the largest portion of the company’s business; its increasing dependence on strong execution in the mass channel for revenue growth and margin stability; the impact of the mass merchant initiative on the company’s existing distribution network, the perception of its core brand and its cost structure; significant upcoming cash outlays for announced restructurings; significant negative pressures from apparel price deflation, uncertain consumer demand and broad global competition on the basis of price and fashion.

The review will focus on these areas of concern but will also consider LS&Co.’s significant, but weakened, market position as one of the world’s largest branded apparel companies; anticipated cost savings from the announced organizational changes as well as the potential for improved financial flexibility upon successful execution of the proposed refinancing. Moody’s will also review the impact, if any, of the terms and the new collateral package for the proposed refinancing on the ratings of the senior unsecured debt.

Levi Strauss & Co., headquartered in San Francisco, California, is one of the world’s largest branded designers, manufacturers and marketers of apparel. Revenues were $4.1 billion for the fiscal year ended November 2002.

EX-99.2

EXHIBIT 99.2

Fitch Affirms Levi Strauss At ‘B’ – Rates Proposed ABL/Term Loan ‘BB/BB-’.

NEW YORK-(BUSINESS WIRE)-Sept. 12, 2003-Levi Strauss & Co.’s (Levi) $1.7 billion senior unsecured debt is affirmed at ‘B’ by Fitch Ratings following Levi’s announcement regarding organizational changes that will eliminate about 650 salaried positions throughout the world and necessitate restructuring charges of $70-80 million. In addition, Levi’s proposed bank credit facility is expected to be rated by Fitch as follows:

– $650 million asset-based loan (ABL) due 2007 ‘BB’;

– $500 million term loan due 2009 ‘BB-’.

Upon closing of the new bank credit facility, the ‘BB-’ ratings on Levi’s existing $375 million revolver and $368 million term loan will be withdrawn and the new bank facility ratings will become effective. Proceeds from the new bank facility are expected to be used to repay amounts outstanding under the company’s existing bank facility, accounts receivable securitization and letters of credit. The Rating Outlook remains Negative, reflecting the continued challenges Levi faces in stimulating top-line sales growth and maintaining operating margins.

The ratings reflect the ongoing difficulties Levi has encountered in increasing sales and profit margins. The slower than expected pace of debt reduction, which has been largely driven by the cash costs of the restructuring charges and the weak retail environment and shows no signs of easing, are also factored into the assigned ratings. In addition, the uncertain impact of the Levi Strauss Signature line on the company’s core business remains a concern. These factors are weighed against Levi’s solid brands, with leading market positions as well as the geographic diversity of its revenue base, and sufficient cash flow generation to meet capital needs.

The three notch ratings differential between the senior unsecured debt and the ABL reflects the restrictive nature of the borrowing base and substantial asset coverage. The one notch difference between the ABL rating and the term loan rating is due to the nature of the assets, Levi’s trademarks, which secure the term loan. While the trademarks provide sufficient overcollateralization for the term loan, they are also significantly less liquid than the assets securing the ABL and subject to Levi’s performance.

Credit measures will be modestly weaker than previously expected, as cash flow that had been earmarked for debt reduction will be used to pay for restructuring costs. However, leverage at year end will be somewhat better than at the end of the second quarter, when total debt/EBITDA reached 5.8 times (x). Fitch expects Levi’s leverage to improve significantly in 2004 as EBITDA benefits from cost savings associated with the restructuring. In addition, though revenues in its core business are expected to remain soft, the full-year benefit of the Levi Strauss Signature line, coupled with the cost savings, should lead to a substantial improvement in the company’s profit margins. To the extent profitability or revenues are materially less than currently anticipated, a ratings downgrade would be likely.

Though market share has slipped over the last few years, the Levi brand remains one of the most well-recognized brand names in the world and its products continue to hold leading positions in most markets. While denim products account for the majority of Levi’s sales, the company’s Dockers brand, which accounted for about 25% of revenues, holds the number one market position for khaki pants in the U.S. In addition, Levi continues to introduce more innovative product, such as Type 1 jeans. However, the ability of Levi to differentiate itself from its competition with an ongoing line of more fashionable products and an updated image remains key to its future success. Levi’s recent introduction of the Levi Strauss Signature line into the mass channel, particularly Wal-Mart’s U.S. store base, is expected to help stem the erosion in top line revenues. Cannibalization of Levi’s core Red Tab products has been limited to date, however the ultimate impact on the core product line remains unknown. With products sold in about 100 countries worldwide, Levi also benefits from the geographic diversification of its revenue base.