Bidding for the assets of bankrupt Hartmarx Corp. is at a critical stage.
Three final bids were to be unsealed over the weekend as secured and unsecured creditors begin comparing the proposals. They have a company-imposed deadline of Friday to select a so-called “stalking horse” bid, sources close to the bidding process said.
Sources said the company’s preference is to lock up the sale process before it begins negotiations on an extension of its debtor-in-possession financing facility that is set to expire in July. Hartmarx filed for Chapter 11 bankruptcy court protection in January.
All three bids are said to be from private equity groups. One bidder is believed to be a Midwestern financial consortium. A month ago, men’s wear designer Joseph Abboud surfaced as an interested party whom sources suggested was connected to the group, but he has declined comment regarding an interest in the 137-year-old Hartmarx.
Another bidder sources cite is private equity firm TPG, formerly known as Texas Pacific Group. Based in Fort Worth, TPG has invested in Swiss leather goods maker Bally International, J. Crew Group and Neiman Marcus Group, which it coowns with private equity firm Warburg Pincus. Executives at TPG could not be reached for comment.
Sources said the third is London-based Emerisque, a private equity firm that specializes in turnaround situations. Cofounded in 2003 by Ajay Khaitan, its previous apparel investment with Sun Capital Partners and The 180 Group was denim brand Lee Cooper. A spokeswoman for Emerisque declined comment.
It could not be determined what the final bids are, but earlier nonbinding proposals from about a month ago were believed to have ranged between $95 million and $115 million for the entire company. Only one of the final three bids is apparently without any contingencies.
Sources said Emerisque can close fairly quickly because it doesn’t need to obtain financing to complete the deal or conduct due diligence on the value of existing inventory. Emerisque is also viewed by a textile source as likely to keep the Hartmarx operation intact, a move that would keep most of the existing jobs in the U.S., this person said.
A debtor’s options are liquidation, piecemeal sale or a buyer for the entire operation. Bankers and financial sources close to the Hartmarx bidding process said the sale is focused just on bidders interested in the entire company as a going concern.
One source also said liquidation is not the answer, as it might pull in only around 25 cents on the dollar given the current economic downturn. The question is whether creditors, who remember a more flush period when valuations were higher, can be convinced.
There are said to be three other parties itching to get invited to the party, but they have been locked out thus far, since they are interested in only certain assets. One is apparently IAG, the apparel firm led by Spencer Hays. IAG has declined comment regarding its interest in Hartmarx. One banker said Hays is interested only in the firm’s Hickey Freeman division.
Two others are said to be interested in Hickey Freeman and Hart Schaffner Marx. One of those is private equity firm J.W. Childs Associates. A source close to J.W. Childs said it was interested in moving manufacturing to Fall River, Mass., where the private equity firm could create synergies with the operations of its Joseph Abboud brand.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty