NEW YORK — Hartmarx will terminate two more of its moderate tailored clothing licenses as part of its most recent plan to pull back from the channel. The Chicago-based manufacturer said it expects to incur charges related to these changes of between $13 million and $14 million.
Citing competition from private label brands and retail consolidation, CEO and chairman Homi Patel said the company will end its DKNY Donna Karan New York license, effective immediately, and will conclude its Perry Ellis license at the end of 2008.
Additionally, the company has renegotiated royalties and advertising allowances with two remaining tailored clothing labels, reduced the number of in-stock programs, raised prices for 2008 goods, cut back on inventory and staff for its moderate tailored clothing lines.
“We have taken significant…actions to eliminate several lines of moderate price tailored clothing, which will significantly adversely impact fourth quarter and full-year results for 2007, but which are expected to better position the company for an earnings recovery for the full year 2008,” Patel said in a statement.