Moves put Hamburgers' future in doubt Chain discusses selling its leases

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 and it appears to signal the execution of those plans.

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

"We have had preliminary discussions with third parties and landlords to transfer, assign or sell leases," said Jack Kaminski, president of the company, which started out as an 8-by-8-foot tailor's shack near the Inner Harbor when Millard Fillmore was president.

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

Michael Sullivan, chief executive of Joppa-based Merry-Go-Round Enterprises, 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 spokes woman 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 which of the Columbia-based company's malls were being discussed. 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 yesterday that Hamburger's would announce today 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 that 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 New York-based International Fashion Apparel Corp. Mr. Golden executive vice president of both companies. Hugo Boss AG was acquired recently by an Italian company, Marzottoa SpA.

Claire Kent, a retail analyst with Morgan Stanley in London, said she had little doubt that Hamburgers' closing was a "foregone conclusion." Hugo Boss would like to sell the chain as a whole, she said, but "that's quite unlikely" given the state of the clothing business.

"The decision is made," Ms. Kent said. "I don't know when actually they will do the closing."

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.

Hamburgers got its start in 1850 when Isaac Hamburger, a 25-year-old apprentice tailor, borrowed $300 from a friend of his father and opened his rickety shack on Harrison Street at the old Marsh Market, where the Fish Market now stands.

In its early years, Hamburgers was a manufacturer as well as a retailer, and the company did not give up making clothes until 1922. From its start, the company was staid, conservative and slow to change. For decades, Isaac Hamburger refused to make clothing with those newfangled devices called "sewing machines." He finally relented in 1885.

Through the second half of the 19th century, Isaac Hamburger & Sons migrated from location to location, finally moving to Baltimore and Hanover streets in 1906, three years before Isaac Hamburger died at 84. The main store remained at that location for 57 years until it was demolished to make way for Charles Center, which opened in 1963.

Hamburgers took the most conspicuous spot in that center, in an unusual store spanning Fayette Street where it meets Charles Street. It also added women's clothing to its offerings that year.

In 1967, the founding family sold Hamburgers to the Phillips-Van Heusen Corp., which installed its own management team in 1969.

Phillips-Van Heusen ran the chain through its Joseph & Feiss division until 1987, then sold that unit to a group of investors that in turn sold it to Hugo Boss, a German manufacturer of stylish menswear, in 1989. The new owners brought in managers who attempted to revamp Hamburgers button-down image by bringing in trendy, upscale European fashions.

It wasn't enough. Sales at Hamburgers, which survived the Great Depression without a layoff, stagnated in a recession that has taken a devastating toll on the clothing business as men across the country decided to make their old suits last another year.

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