Hamburgers chain moving to close some stores Owners also plan to hold clearance sale to raise cash. GOING UNDER?

June 19, 1992|By Michael Dresser | Michael Dresser,Staff Writer

The Hamburgers clothing store chain, one of Baltimore's oldest and best-known businesses, is moving to close some of its 12 stores and plans to hold a clearance sale to raise cash.

The decision comes two months after the chain's parent company warned that it would close the 142-year-old chain if it could not be sold.

No buyer has surfaced, and analysts say it is unlikely that a savior would suddenly appear, given the depressed state of the industry.

"We have had preliminary discussions with third parties and landlords to transfer, assign or sell leases," says Jack Kaminski, president of the company, which began as an 8-by-8-foot tailor's shack near where the Inner Harbor now flourishes.

Mr. Kaminski would not divulge further details yesterday about the lease negotiations, but two large companies have confirmed that they are talking with Hamburgers about its stores.

Michael Sullivan, chief executive of Merry-Go-Round Enterprises in Joppa, said yesterday that his national clothing chain has an "agreement in principle" to acquire three unspecified Hamburgers stores. Hamburgers operates nine stores in the Baltimore area, two in Delaware and one in Lancaster, Pa.

Cathy Lickteig, corporate spokeswoman for the Rouse Co., said yesterday that Hamburgers has "asked to be let out of a couple of our malls, and we're in the process of negotiating with them now." She would not specify the malls.

Hamburgers is a tenant at Rouse's Owings Mills Town Center, White Marsh Mall and Columbia Mall, three of the stronger malls in the Baltimore area.

Germany's Hugo Boss AG, which owns Hamburgers through two levels of subsidiaries, said in April that it intended to sell or close its U.S. retail clothing operations, which include Hamburgers, a single Kennedy's store in Boston and the 17-store Harris & Frank chain out West.

Mr. Kaminski said that Hamburgers today would announce plans for an "inventory clearance sale to generate cash." Hamburgers is not characterizing the clearance as a going-out-of-business sale, and Mr. Kaminski had no further comment on whether Hamburgers would remain in operation.

David Golden, a spokesman for the Hugo Boss subsidiary that is Hamburgers' parent, said yesterday it was too early to say what would become of the chain, but he reaffirmed his company's intentions regarding Hamburgers.

"The intent of the company and the group is to divest of the retail operations, either through the sale of specific assets or the entire chain." He also confirmed that the company was discussing the sale of leases to Merry-Go-Round.

Hamburgers' parent is TJFC Inc., which in turn is a subsidiary of International Fashion Apparel Corp. of New York. Hugo Boss AG was acquired recently by an Italian company, Marzottoa SpA.

Claire Kent, a retail analyst with Morgan Stanley in London, says "the decision is made" to close Hamburgers but "I don't know when actually they will do the closing."

Hugo Boss would like to sell the chain as a whole, she says, but "that's quite unlikely" given the state of the clothing business.

According to the Daily News Record, a trade paper, Hugo Boss Group's losses on its U.S. retail operations forced it to take $21.8 million in charges against 1991 earnings.

In November, Hugo Boss AG's annual report projected a loss of $3.8 million for Hamburgers.

Besides the downtown store and the three stores in Rouse malls, Hamburgers' Baltimore-area stores are in Towson Town Center, Annapolis Mall, Marley Station Mall, Reisterstown Road Plaza and Hunt Valley Mall.

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