The Chicago-based producer of tailored clothing and golf and casual apparel said it was notified by NYSE Regulation Inc. on Thursday that its shares had fallen below the New York Stock Exchange’s listing standard, which requires a minimum average market capitalization of $25 million over 30 consecutive trading sessions.
Hartmarx’s market cap was just $9.7 million at the close on Friday. Like other firms whose fortunes are tied directly to consumer spending, the company’s stock has been hit hard since October, when the banking sector meltdown speeded up and a serious global economic slowdown became apparent.
Shares of Hartmarx rose 7 cents Friday to close at 28 cents. Over the past year, the stock has traded as high as $4.43 and as low as 13 cents.
The exchange will suspend trading of Hartmarx as of Wednesday morning and take steps to delist the stock. Hartmarx said its common shares would continue to be listed on the Chicago Stock Exchange, where the stock will retain its ticker symbol HMX.
“The delisting from the NYSE does not constitute a default under the company’s lending arrangements and will not change the company’s filing of periodic and other reports with the Securities and Exchange Commission under applicable federal securities laws,” the firm said.
For the nine months ended Aug. 31, Hartmarx posted losses of $7.4 million, which compared with earnings of $2.5 million a year earlier. Sales shrank by 8.9 percent to $374.5 million.
Even before the economy cratered, Hartmarx’s stock was weighed down by poor sales in its heritage moderate clothing business. During the past two years, Homi Patel, chairman, president and chief executive officer, has mitigated the company’s reliance on suits, backing out of licenses, including those with DKNY and Perry Ellis, while diversifying the company’s holdings through acquisitions.
The company purchased premium sportswear brand Monarchy in 2007, and earlier this year won the worldwide license for Dr. Martens men’s and women’s casualwear. Those moves started to pay off, with Monarchy posting double-digit gains in its first year under Hartmarx’s stewardship, but the current economic crisis has dashed earlier hopes to eke out a small profit this year.
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