Obama's suit-maker files for Bankruptcy

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Hartmarx Files for Bankruptcy Amid Sales Decline

By Karen Gullo

Jan. 23 (Bloomberg) -- Hartmarx Corp., the Chicago-based clothier that made the suit President Barack Obama wore to his inauguration, filed for bankruptcy protection, citing a decline in sales of its luxury goods and its inability to borrow.

The company’s petition for Chapter 11 protection, filed today in U.S. Bankruptcy Court in Chicago, listed assets and debt of $100 million to $500 million each.

Hartmarx’s existing lenders agreed to provide a so-called debtor-in-possession loan of as much as $160 million to finance operations during bankruptcy, according to court filings. The men’s suitmaker also hired financial advisers Moelis & Co. to seek investors or a buyer, the company said in a statement distributed by PR Newswire.

“As we pursue strategic alternatives, we will continue to provide the same high quality apparel under the same well-known and trusted brands,” Chief Executive Officer Homi Patel said in the statement.

Obama wore one of the company’s Hart Schaffner Marx suits at his inauguration on Jan. 20, the Chicago Sun-Times reported. Hartmarx, started in 1879, sold the first zippered pants in 1936, according to its Web site.

The debtor-in-possession loan will allow Hartmarx to pay vendors, and the company is seeking court authority to continue operations and pay employees, according to the statement.

A decline in clothing purchases, particularly luxury items, coupled with lower borrowing capacity under a senior credit facility led to the bankruptcy filing, Hartmarx said in the statement.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aosgLzzNs_.4&refer=home