Court clears After Six's move to Md. Tuxedo maker plans to relocate in Bel Air

August 07, 1992|By Michael Dresser | Michael Dresser,Staff Writer

After Six is apparently coming to Maryland after all.

A federal district judge in Philadelphia handed down a decision yesterday clearing the way for CSE Acquisition Corp., a group led by former Baltimore tire merchant Charles Ezrine, to move the manufacturing operations of the nation's largest tuxedo maker into the recently closed Gleneagles plant in Bel Air.

The move could mean new jobs for workers who were thrown out of work June 1 when Chicago-based Hartmarx Inc. closed its rainwear plant at 314 Williams St., said Earle K. Shawe of Shawe & Rosenthal, the Baltimore firm that represented CSE during the hearing on the proposed injunction.

Workers at After Six Inc.'s plant in Philadelphia will have first call on the estimated 200 to 250 jobs, but few are expected to relocate or commute. William J. Rosenthal, Mr. Shawe's partner, said it would be "reasonable to anticipate that there's going to be a couple hundred people employed" from the Baltimore area.

Mr. Rosenthal added that CSE intends "to take advantage of the skills of the employees who were employed by Hartmarx."

U.S. District Judge J. Curtis Joyner's ruling yesterday denied a bid by the Philadelphia Joint Board of the American Clothing and Textile Workers Union for an injunction blocking today's closing of the $25 million sale of the company to CSE.

The labor group asked the court to block the move until an arbitrator could rule its complaint that any sale that would close the After Six factory would violate its labor contract.

The union contended that the move would cost the Philadelphia area 358 jobs and more than $1 million in tax revenues annually. The three-day hearing on the motion attracted considerable attention from local political leaders. Philadelphia Mayor Edward Rendell and U.S. Senator Arlen Specter, R-Pa., both testified for the union.

Attorneys for After Six and CSE, however, argued that the tuxedo company, which has piling up heavy losses since 1987, had been cut off by its creditors and was on the brink of closing. If the sale to CSE was blocked, they said, After Six would have no choice but to liquidate.

CSE told the court that if it was enjoined from closing the $25 million sale today, it would have to back out. Among other reasons, it said its financing for the deal would expire.

Judge Joyner upheld these arguments, ruling that the potential harm to the union and the Philadelphia area did not outweigh the danger to the company if the deal were scuttled. He also said the union had failed to show its arbitration challenge was likely to succeed and that CSE would not be bound by the labor contract with After Six.

The union's chief attorney, Bernard Katz of Meranz & Katz of Philadelphia, could not be reached for comment yesterday evening on whether the union would ask the Third U.S. Circuit Court of Appeals for an eleventh-hour injunction. However, Adam Feinstein, a spokesman for the firm, said: "This whole fight is not over as of yet."

Company officials could not be reached for comment yesterday, but Mr. Shawe said the company expects that "a more efficient cost structure" will permit it to make money where After Six piled up losses.

The market for formal wear has been depressed by the economic downturn and by a decline in the number of potential customers since the years when Baby Boom men were in their teens and twenties. In addition, domestic producers have been hurt by competition from low-wage overseas producers.

After Six sells about 70 percent of its products under its own label and another 30 under a license from Christian Dior, which is expiring in September. Mr. Rosenthal said Dior has awarded the new license to J. Schoeneman, an Owings Mills-based clothing company, but that Schoeneman has agreed to sublicense the Dior line to CSE.

Chicago-based CSE often buys distressed or bankrupt companies and tries to return them to profitability.

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