Cleveland's wealthiest businessman will buy the oldest suitmaker in the U.S. for $1.9 million, following tense negotiations with the Hardwick family and an abrupt exit by a competing bidder.
Allan Jones, a pioneer in the payday loan industry, says he will invest millions of dollars into Hardwick Clothes, an ailing 134-year-old clothing manufacturer, which is hemorrhaging more than $100,000 per month and is poised to lose more during the slow summer season.
"The purchase price is just the down payment," Jones said. "We've got to get sales up."
Jones hired a national firm to find a new CEO, and says he's close to securing an agreement to bring in a new leader to helm the 235-worker company, which once employed 900 suitmakers.
Hardwick filed for bankruptcy protection in December after years of losses, because it was unable to make a required payment to the U.S. Pension Benefit Guaranty Corp. The company was hurt by foreign imports, officials said.
Chattanooga businessman Joe V. Williams III initially offered to outbid Jones's $1.9 million bid by $200,000, but was unable to come up with the required upfront cash nor complete the deal without financing. His attorney, David Fulton, requested to withdraw from the bankruptcy case, citing "other circumstances." Williams attempted to address the court, but was denied permission because no attorneys would call him as a witness.
Williams and Fulton both left the courthouse of the U.S. Bankruptcy Court in Chattanooga mid-hearing today, leaving Jones as the sole remaining bidder.
Current Hardwick CEO Tommy Hopper said Jones' bid was the best offer, and that any delay or attempt to wait for Williams to come up with cash would run up Hardwick's debt to the its current financier, which is supplying cash to fund the company's day-to-day operations.
Jones owns a number of short-term lending services, such as Check Into Cash, Loan by Phone, U.S. Money Shops, Buy Here Pay Here USA, LendingFrog.com, but has also diversified into real estate, dining and services. This will mark his first foray into manufacturing, and he says he's in it for the long haul.
Former news report: