Hartmarx Deal Closes

By Kevin Robinson in News on Aug 11, 2009 3:40PM

Suitmaker to the president, Hart Schaffner Marx, or Hartmarx, was bought by London-based Emerisque Brands for $128.4 millon. The deal was approved in June after several congressmen and state politicians pleaded with Wells Fargo, which took billions in federal bailout funds, to sell the clothier to Esmerisque, which agreed to keep production in the United States. Hartmarx slid into bankruptcy during the economic collapse of late 2008 as its access to revolving credit dried up. Wells Fargo held the bulk of Hartmarx's debt. As late as June the bank was reported to be considering selling the unit to the highest bidder for quick liquidation.

While most of Hartmarx's American operations will remain open, 300 workers in Rock Island have lost their jobs, as the plant was abruptly closed. Employees have received paychecks for one week of work, but say they are still owed for another week. Hartmarx says they will be paid on Monday. According to court documents, Hartmarx demanded an additional administrative claims of $2.4 million, including $700,000 in legal fees at the final sale. While the reasons for closing the plant aren't clear, union officials say that the additional costs at the closing of the sale may have contributed to the closure. The average worker at Hartmarx earns about $21,000 a year.