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Hickey Freeman sale finalized
The sale of the Hickey Freeman parent company was approved by the U.S Bankruptcy Court Wednesday.
Authentic Brands Groups (ABG) and W-Diamond Corporation have been given the go ahead to purchase the intellectual and physical property of the company.
The sale worked out as a joint purchase, with the intellectual property of iconic clothing brands Hickey Freeman and Hart Schaffner Marx going to Authentic Brands Group, and the operating company being purchased by W-Diamond corporation.
W-Diamond corporation is the new business of Doug Williams, the former CEO of parent company, HMX Acquisitions Group which went bankrupt.
Williams says the decision provides workers in upstate New York and the Mid-West with job security.
“Fundamentally what it means is that we saved 1,100 American jobs, preserving the manufacturing in Rochester as well as Chicago,” he says.
Williams says the sale will also ensure that operations remain in the U.S. And he says he intends for the factories to operate in their current locations for at least another century.
“I flew up to Rochester and Met with all of our team, and all the factory workers and told them what’s going on and to go home for Christmas and be with their families and know that they’ve got jobs when they come back,”Williams says.
The sale reached well over $100 million, and will be closed Friday, according to Williams.
Intellectual property purchaser Authentic Brands Group was the sole outside bidder at the auction Monday.
The union representing most Hickey Freeman workers in Rochester originally opposed the group as a buyer, but Williams says they now fully support the deal.
“The union ultimately withdrew all of its objections and has thrown their full support behind the company,” he explains.
Manager of the Workers United Union, Gary Bonadonna, says the backflip in their stance comes after discussion with Williams and ABG in which they were given assurances that jobs would be safe in the long term.
“It sounds like a deal has been worked out that is favourable and that it is sustainable and that the company should, assuming the judge approves everything, we should be fine going forward,” Bonadonna said Tuesday.
Williams says the deal will allow the brands to move forward, and remain an integral part of the local communities in Rochester and Chicago.
Previous reporting from October 29th
Hickey Freeman’s parent company HMX Group filed for bankruptcy protection last week, and the union that represents most of the company’s workers says they’ve been actively trying to secure financing for the purchase of HMX Group; as the Innovation Trail’s Kate O’Connell reports,.
Manager of the Rochester branch of the United Workers union, Gary Bonadonna says they’ve been in discussion with several union-friendly companies they believe would keep Hickey Freeman in Rochester. They include the Yucaipa Companies – a private equity investor founded by billionaire Ron Burkle.
Bonadonna says finding the right buyer is key, as workers and his union are worried their jobs will go elsewhere under new ownership.
“We have to get the right buyer, someone that is committed to manufacture here in Rochester and in America, and not just buy the brands and then ship the work overseas.”
Bonadonna says he blames the parent company for the situation workers are in but despite the recent financial turmoil, the brand remains strong.
Dateline: Monday 22nd October
Workers at the Hickey Freeman factory in upstate New York were joined by Senator Charles Schumer in a rally today. The parent company of Hickey Freeman, HMX Group, filed for bankruptcy protection last week and workers are worried the factory in Rochester will close.
Senator Schumer joined about 250 supporters and workers at the factory in Rochester to lead a call for a boycott of the iconic brand if jobs are taken elsewhere.
He says the majority shareholder in HMX Group, Indian-based apparel company SKNL, is to blame for the bankruptcy filing after failing to meet its funding commitments.
Senator Schumer says the only thing that will keep jobs in Rochester is finding the right buyer for the brand.
“We need to get a buyer who is committed to staying in Rochester, we don’t want any vultures coming in, taking the name and then closing the company here in Rochester.”
Dateline: Friday 19th October
On Friday: the CEO of HMX Acquisition Corp., the owner of the iconic Rochester-based men's clothing company Hickey Freeman says that no job layoffs or closures are planned, despite the parent company filing for bankruptcy protection in the U.S. Bankruptcy Court in Manhattan today.
Doug Williams, the CEO of HMX Group spoke the Innovation Trail's Kate O'Connell and the interview is posted in full above.
Here are some highlights from the interview.
"We're in the midst of recapitalizing the company, and (so) to do so it required that we go through a chapter 11 process to allow that to happen, and we have selected a stalking horse bidder for the purchases of the assets of the company, and (in) that bidder they will own the intellectual property and license if back to the company in a long-term basis to continue to operate the factories and support all our employees in the United States."
"Our focus is on preserving all the jobs in the United States. Both factories are very important to us, both in Rochester as well as Chicago, (NB: HMX Acquisition also owns the Hart Schaffner Marx brand based which is produced at a site in Chicago), we see it as a competitive advantage for our company and so at this time there are no layoffs planned, and we actually expect to continue to grow our business and eventually add more workers."
"I would say to all of our employees, they know me well and my focus is again building a great company and preserving the jobs, so they have my personal commitment to ensure that (that) happens".
Hickey Freeman was the subject of a $7 million bailout package in 2004, engineered by the company, New York state, the City of Rochester and the UNITE union representing the workers.