The owner of America's oldest tailor-made clothing company is appealing to President Trump to help level the playing field for the Cleveland, Tennessee suit maker by imposing import duties on tailored men's suits made in Canada and Mexico.
Allan Jones, owner of Hardwick Clothes in Cleveland, said Wednesday that his company is at a competitive disadvantage because of the 25 percent duty U.S. companies must pay to import fine wools from Italy that similar luxury clothing producers in Canada and Mexico don't have to pay.
Jones wants the Trump administration to address the trade imbalance by revamping the North American Free Trade Agreement (NAFTA), which allows Mexico, Canada and the United States to trade most goods they produce with one other duty free.
"When (former presidential candidate) Ross Perot said there was going to be a giant sucking sound from NAFTA, he was correct," Jones said. "The problem is that our neighbors to the north and the south can order the fine wool like we do from Europe and pay no import tax like we have to and then once they have manufactured their clothes using that fine wool they can sell their suits to us duty free. It's very hard for us to compete with Mexico and Canada when we have costs that they don't have."
Jones said Hardwick's 300-employee staff could nearly triple and use all of the new production equipment he has bought if a 25 percent import duty on tailored clothes was imposed on Mexico and Canada.
"Right now, we have more business, but we have to pay higher wages and we need to get some relief or some type of tariffs on Canada and Mexico," Jones said. "If we were to put this (25 percent import duty) on, we could skyrocket our staff to 900 employees at Hardwick pretty quick."
Investing in Cleveland legacy
Jones, who has made a fortune in the payday lending business as owner of Check Into Cash in Cleveland, bought Hardwick Clothes in 2014 and has pumped $24 million into America's oldest suit maker over the past four years to upgrade and rescue the Cleveland company. Hardwick turns 138 years old on Saturday, but Jones said the company's future depends upon addressing the extra costs imposed by U.S. duties on woolen products and the way in which those tariffs are rebated back to domestic industry.
Jones said Hardwick also is hurt by the current formula for allocating the wool rebates from the import duties because the rebates are based upon 1999 sales data that gives disproportionately more to his main competitors, Mickey Freeman and Hart Schaffner Marx.
"This isn't a rebate," Jones said of the Wool Trust Fund and the way it allocates rebates. "It's a subsidy that places us at a distinct disadvantage."
Jones is appealing to Congress to revamp the rebate formula to use existing sales, rather than historical sales from the past, and is hoping President Trump, who Jones has long supported, will impose import duties on Canada and Mexico on tailored clothing as part of the president's stated goal of renegotiating NAFTA.
Protecting America's oldest suit maker
Since its founding in July 1880, Hardwick has survived two major fires, two World Wars, the Great Depression, "and even leisure suits," Jones said.
"Today, the company is penalized by tariffs on raw materials necessary to manufacture clothing and an unfair, disproportionate rebate subsidizing the company's competitors," he said.
The import duties on wool imported from Europe stems from a tariff that began in 1824 to protect woolen mills in America. A century later in 1930, Hardwick Woolen Mills in Cleveland was the largest clothing manufacturer and mill in the world. When the company leadership saw the decline of mills, Hardwick sold the milling business to Burlington Fabrics to concentrate on their tailored clothing.
"While fine woolen fabric mills in America have since ceased to exist, the tariffs have not," Jones said.
Since buying Hardwick in 2014, Jones has recruited top executives from Hart Schaffner Marx, Ken Hoffman and Bruce Bellusci, as chairman and CEO, respectively, and lured other top manufacturing and engineering executives from other rival firms to Hardwick's operation in Cleveland.
"We have compiled a top, all-American team here, but I cannot compete with what I am up against right now," Jones said.
Contact Dave Flessner at email@example.com or at 757-6340