Cleveland millionaire Allan Jones, who has made a fortune from his Check Into Cash business, is ready to write his own $2 million check and pump million more into reviving America's oldest privately held clothing manufacturer, also based in Cleveland.
Jones said Monday he thinks there is still a market for American-made tailored clothing and is eager to help preserve and grow back the bankrupt Hardwick Clothes Inc.
"I've watched this business over the years go down and down and I think I can bring in the talent necessary to turn this company around," Jones said in an interview from his office in Palm Beach, Fla. "I'll be the first to tell you I don't know anything about the clothing business. But I've hired a recruiting company to help bring in new talent and I know there are already a lot of good, experienced employees who work at Hardwick."
Hardwick was founded in 1880 by C.K. Hardwick and has remained in the same family ever since. But in December, the 134-year-old business filed for protection in federal bankruptcy court after it was unable to pay debts due on its employee pension program, which actuaries estimate was at least $7 million underfunded.
Tommy Hopper, the fifth generation CEO at Hardwick Clothes, said he filed for bankruptcy when the federal agency responsible for maintaining the solvency of private retirement programs, the Pension Benefit Guarantee Corp., filed a tax lien against Hardwick to collect $1.5 million the agency said was due from the company.
PBGC will ensure the pension benefits are paid to Hardwick retirees and employee. But Hopper said company owners also needed extra funds to grow back the business, which has shrunk from 700 employees to 225 employees over the past two decades.
Through the years, Hardwick has sold most every type of men's garments, including jeans, dollar pants, knicker suits, even convict strips and leisure suites. The company has focused on tailored, upscale men's blazers and suites for most of its recent business.
The company spun off its woolen mill plant in the 1950s to Peerless Mills and Hardwick froze its defined benefit pension plan in 2006. After taking market losses during the Great Recession, the company appealed to the PBGC for assistance in shoring up the underfunded retirment plan. But the agency filed for a lien against the business when Hardwick wasn't making payments PBGC were due.
"Allan Jones brings a real commitment and support for our business and our employees that we hope can help us build back the business," Hopper said.
Jones has submitted a so-called "stalking horse" bid for the assets of the company. U.S. Bankruptcy Court Judge Shelly Rucker has set May 1 deadline for other interested parties to bid for the assets of Hardwick Clothes Inc. and an auction will then be conducted on May 2, if more than one qualified bid is received.
When Jones met with Hardwick employees to announce his purchase intentions last week, he said he was surrounded by veteran workers with more than 25 years experience. The average tenure at the Cleveland plant is more than 13 years.
"I look for stability in a company and that's what I see at Hardwick," Jones said. "I think interest in American-made products is coming back."
The veteran businessman said he will not remain silent if, as happened in the recent Olympics, the blazers for the U.S. team are made in China.
"That's unacceptable," he said.
Contact Dave Flessner at email@example.com or at 757-6340.