Levi Strauss & Co. lost $13.4 million in the second quarter as its U.S. sales continued to fall. The San Francisco-based owner of Levi’s and Dockers said its efforts to revive sales are being stymied by the prolonged retail slump.

The firm’s revenues in the second half should improve over last year’s levels but most of that growth will come from its new mass brand, Levi Strauss Signature, the company said. The worse-than-expected retail environment is forcing Levi’s to take on more debt than it had planned, so it has negotiated amendments to its $750 million senior credit facility.

Levi’s now expects its net debt to peak in the third quarter at around $2.35 billion—about $300 million more than it had originally expected. The loss, for the quarter ended May 25, compares to a $75.7 million, charge-heavy loss a year earlier. Excluding restructuring charges net of reversals affecting both periods, Levi’s lost $17 million in the most recent quarter against income of $21 million in 2002. Privately held Levi’s releases its results because its debt is publicly traded.