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Ron Burkle May Enter HMX Bidding

Financial and market sources said they expect Yucaipa to enter the fray after a bankruptcy filing takes place.

NEW YORK — As sources say that the three firms potentially interested in buying HMX Group have now signed confidentiality agreements with the company, a former bidder — Ron Burkle’s Yucaipa Cos. — is again eyeing its brands.

This story first appeared in the October 16, 2012 issue of WWD.  Subscribe Today.

A spokesman for Yucaipa confirmed the private equity firm’s interest in HMX. “Ron has great relationships with the unions and they asked him to take a look,” according to the spokesman.

If it does enter the fray, it won’t be the first time Burkle has made a run at HMX: his private equity firm bid for certain assets when the then Hartmarx Corp. voluntarily filed for Chapter 11 bankruptcy court protection in 2009.

Back then, Yucaipa was only interested in the brands, such as Hickey Freeman and Hart Schaffner Marx, and not the firm’s factories. Financial and market sources said they expect Yucaipa to enter the bidding after a bankruptcy filing takes place.

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Yucaipa is not currently in the bidding mix. The three firms that are currently in talks with HMX are Authentic Brands, Iconix Brand Group and Bluestar Alliance.

S. Kumar’s Nationwide Ltd. acquired Hartmarx during the bankruptcy in 2009 and renamed the new operating firm HMX Group.

One stumbling block, as it was in the 2009 bankruptcy, is the factories that are under HMX’s ownership. Private equity firms want just the intellectual property assets. Even strategic firms prefer just the brands. The factories are in some respects outdated and poorly configured, said one individual who requested anonymity.

Should the IP assets get sold if a bankruptcy filing were to occur, and the factories shut down, that would be a blow to HMX’s “Made in America” stance, particularly as more smaller apparel firms and fashion brands are seeing the benefits of increasing their production in the U.S.