Will buyout offer save President's suitmaker?
Officials at Wells Fargo & Company remained mum Wednesday about a new buyout bid for Chicago-based suitmaker Hart Schaffner & Marx.
London-based Emerisque has offered more than $100 million for Hartmarx Corp., that could potentially save the company from liquidation. But the offer is good for only 24 hours, meaning it expires sometime Thursday.
Roughly 1,000 jobs could be lost in Illinois and Indiana alone, including about 600 jobs at a Des Plaines manufacturing plant where workers have staged rallies for the past two weeks.
"We would urge Wells Fargo to accept this offer," Des Plaines Mayor Marty Moylan said Wednesday. "We think it's fair and equitable. It's a big boost for the local economy and what it does for the workers - it provides them with a decent job, pension and benefits. We have to do everything we can to save jobs locally and nationally."
The maker of high-end suits - President Barack Obama wore Hart Schaffner & Marx at his inauguration - filed for Chapter 11 bankruptcy protection on Jan. 23. Hartmarx owes more than $114 million to creditors; it's primary lender is Wells Fargo.
With the 24-hour window Wells Fargo must act fast, said Workers United Treasurer Joe Costigan during a Wednesday picnic and rally at Hartmarx's Des Plaines manufacturing plant.
"That's an offer of 90 cents on the dollar," Costigan said. "We've said all along that Hart Schaffner Marx and the Hartmarx company is of value, and they are a major player in the men's clothing industry, and they are a desirable company. It's inconceivable that Wells Fargo will continue its efforts to liquidate the company given this latest development."
Wells Fargo spokeswoman Jessica Walstrom would not comment on the Emerisque bid, and referred instead to a May 11 statement in which Wells Fargo maintains that Hartmarx has no credible offers from serious buyers. The statement also said the bank group continued to lend to Hartmarx even though the suitmaker lost more than $30 million in 2007 and 2008 and its revenue dropped over 20 percent before filing for Chapter 11 relief.
Hartmarx Corp., a 122-year-old company, operates manufacturing plants in Des Plaines and Rock Island, as well as a warehouse in Indiana, and has facilities employing more than 3,500 people nationwide.
In recent weeks, state officials have criticized Wells Fargo for accepting $25 billion in Troubled Asset Relief Program (TARP) funds, the federal government-backed bailout money, and not letting it trickle down to struggling businesses like Hartmarx.
On Wednesday, Illinois Governor Pat Quinn urged Wells Fargo & Co. to sell Hartmarx Corp., and argued that the fourth-biggest U.S. bank has itself been bailed out by taxpayers.
Last week, Illinois State Treasurer Alexi Giannoulias threatened Wells Fargo Bank would lose $8 billion in state contracts, if the lender does not keep the suitmaker's Des Plaines factory open.
The state of Illinois has deposits with about 250 Illinois banks, but Wells Fargo is its primary banker.
• Daily Herald wire services contributed to this report.