Ranking as the largest maker of men's suits and sport coats in the country at one time was something to crow about. In the khakis-and-open-collar-shirt millennium, such status seems irrelevant, even quaint.
Hartmarx Corp., which got its start as a men's clothing store in Chicago in 1872, is still America's biggest men's tailored clothing company. It's also one of the last.
Call it the incredible shrinking suit market. Men's suit sales have never fully recovered since the dot-com era relegated them to the back of the closet. And the latest economic downturn isn't helping matters.
“All these people laid off at Bear Stearns, they aren't going out to buy suits any time soon,” Homi Patel, chairman and chief executive, said in an interview at Hartmarx's clubby offices in Chicago. “Citigroup just laid off a bunch of people. They aren't going to buy suits.”
Patel's answer, not surprisingly, is to cast a wide net in search of pockets of growth outside of the traditional suit market.
In the past 18 months, Hartmarx signed licensing agreements to sell suits to the burgeoning middle classes of China and India, expanded its women's business by acquiring contemporary sweater and jeans lines, and has gone after the young men's market with the purchase of Monarchy, an edgy denim and casual sportswear collection favored by such Hollywood celebs as Ashton Kutcher and Jamie Kennedy.
The apparel manufacturer is also phasing out the $250 suit, where competition is fierce and profits are thin, and pouring more resources into the luxury market. Its suit brands, Hickey Freeman and Hart Schaffner Marx, aren't exactly household names. So the company is opening showcase stores in major cities, including Chicago, to raise consumer awareness of its more-than-a-century-old tailored clothing brands.
Patel, who owns a 2.1 percent stake in the company, is quick to point out that these branded stores are merely marketing vehicles and he has no intention of returning to the days when Hartmarx reigned over a vast retail realm that almost brought down the company during the recession of the early 1990s. The manufacturer operated hundreds of specialty stores nationwide under a variety of names, including Country Miss, Wallachs, Baskin and Raleighs. It sold the business in 1992 to an investment group.
“The (new) stores aren't meant as a free-standing retail operation,” said Patel. “That's not our intent. These are showcase stores, marketing stores, where we can display the product the way we want to.”
Hartmarx operates two Hickey Freeman stores in New York and one in San Francisco. Another Hickey Freeman is under construction in Chicago and is slated to open in September. The boutique will mark Hartmarx's first store in the Chicago area since Baskin closed in 1994.
The company also is looking to open stores in New York and Chicago to showcase it namesake Hart Schaffner Marx line, but that idea is on hold for at least three to six months as Hartmarx waits for the economy to get better.
“The retail business is tough right now,” Patel said. “We're all going through difficult times.”
Hickey Freeman, a Rochester, N.Y.-based division, makes $1,500 suits sold at Neiman Marcus, Barneys, Mark Shale and Nordstrom. Hart Schaffner Marx suits, also sold at Nordstrom, average $700 to $800.
Industrywide, sales of men's suits fell 9.1 percent for the year through April, according to NPD Group, a Port Washington, N.Y.-based market research group.
Retail analyst Steven Platt said it normally would make sense for Hartmarx to focus on the high-end market, but the timing isn't favorable.
“They're taking all the right steps that anyone would take in their position,” said Platt, a Hinsdale, Ill.-based market researcher and consultant, “but the bottom line is the economy isn't going to be kind to them.”