With the blue books issued and the deadline for initial bids now passed for potential buyers of bankrupt Hartmarx Corp., the firm’s chief executive officer said those waiting to buy just a brand or two may be disappointed.

This story first appeared in the March 5, 2009 issue of WWD. Subscribe Today.

Sources at the troubled company, which filed for Chapter 11 bankruptcy protection on Jan. 23, said offers from more than 10 entities, including both private equity concerns and strategic buyers, were submitted by last week’s deadline.

“The interest has been extremely robust, and I’m very pleased with the response,” said Homi Patel, chairman and ceo of Hartmarx.

Patel is confident Hartmarx will be sold as a single entity and not auctioned off in pieces, as many analysts have suggested. “It’s our intent to get bids for the full company, and it’s very feasible that will happen. More than feasible,” he said.

A source familiar with one bid said Hartmarx was offered about $100 million for the entire company. Bids at this stage are nonbinding.

Hartmarx did not release the names of potential buyers, but market sources indicate IAG, the apparel company led by Spencer Hays, is among the bidders, as is a Chicago-based venture capital group led by men’s wear designer Joseph Abboud. Both declined to comment on their interest in the company.

Hartmarx has the exclusive right to file a plan of reorganization for 120 days from the date of its filing, with an extension of up to 18 months at the discretion of the bankruptcy court.

The presence of private equity players will undoubtedly surprise some in the men’s wear market, who presumed the investment community wouldn’t have the means or the patience to mend the venerable, if beleaguered, apparel firm.

Not so, according to Bruce Raynor, the president of labor union UNITE HERE, which has more than 2,000 members at Hartmarx. He has hit the road in the past four weeks to pitch the company to possible buyers who might keep the company whole and preserve jobs.

“There are three firms that I know of who would keep the company intact,” said Raynor. “It’s more likely in the current economy to be a private equity player.”

Last month, private equity firm Carlyle Group sought the bankruptcy court’s permission to be put on the service list of all documents in the Hartmarx bankruptcy, a request that was approved on Feb. 12. Why it would want all court documents remains unclear. Calls to the firm weren’t returned.

Carlyle already owns Alliance Boots and a 48 percent stake in Moncler.

Patel and others at Hartmarx, as well as their financial advisers, will begin meeting with potential buyers as soon as today, as the firm begins stage two of the sale process. “There are at least half a dozen that will remain in,” he said. “From there, one or two companies will make it to the finish.”

One banker, who represents a potential buyer interested in a few of the Hartmarx brands, said the distressed manufacturer, known best for its men’s wear brands such as Hickey Freeman and Hart Schaffner Marx, has declined to speak with anyone who has expressed interest in the individual brands. Many of them are now waiting in the wings, believing there’s more value in breaking up the bankrupt firm than selling it as a whole.

One ceo of a major men’s wear brand, who requested anonymity, said he will make a play for Hickey Freeman and Hart Schaffner Marx if, and when, they are liquidated. “I just don’t see how the company will be sold in one piece,” he said.

Of course, the interests of the creditors will be the paramount concern of the bankruptcy court in Chicago.

Through the first nine months of last year, Hartmarx lost $7.5 million, versus net income of $2.5 million in the corresponding period a year earlier, and saw sales decline 8.9 percent to $374.5 million, according to court documents. Fourth-quarter results have yet to be reported.

Bankruptcy has prompted Hartmarx to trim its operations over the past two weeks. It recently shuttered Zooey, a women’s casual line it acquired in 2006, which did less than $5 million at wholesale. “The brand was not profitable,” said Patel. “It was a very small business.”

In an attempt to expand its portfolio into women’s wear and higher-margin businesses in recent years, Hartmarx had acquired not only Zooey but also Exclusively Misook, Christopher Blue and other labels. It also acquired Monarchy Collection, a men’s and women’s contemporary collection, in 2007.

Hartmarx also closed or plans to close three Bobby Jones-Hickey Freeman outlets, as well as one full-price Bobby Jones store in Honolulu. The company will continue to operate four other Bobby Jones-Hickey Freeman outlets.

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