After Six, tux maker, files for bankruptcy 40 had been laid off at company plant in Golden Ring area

Men's apparel

September 19, 1996|By Liz Bowie | Liz Bowie,SUN STAFF

After Six Ltd., the Baltimore County tuxedo manufacturer, filed for Chapter 11 bankruptcy protection in an attempt to stave off a further depletion of its business and the loss of about 100 jobs.

The company laid off about 40 employees in its Golden Ring area plant over the past two weeks and now is preparing to reorganize, said James Stankovic, president and chief executive officer.

"We had to stop and file and take a hard look and see what we can do," Stankovic said. "It is going to take a lot of soul-searching."

The strongest portion of the business is AS Licensing Corp., which licenses the After Six name to foreign companies that manufacture out of the country. The company's other subsidiary, After Six Ltd., sells tuxedos to stores that sell or rent them to customers. That company makes shirts in Golden Ring and contracts with other companies to make the pants and coats.

The company was forced into Chapter 11 because of a lack of available cash to pay creditors, rather than industry trends. "I think the -formal-wear business has escaped the normal downtrends in the menswear business," said Stankovic.

Foreign competition apparently has left the small niche business unaffected, he said.

After Six needed to be cash rich, because it must pay contractors who manufacture the tuxedos up front or within a short time after the goods are delivered. Its customers, however, had extended terms of credit. A more heavily capitalized business or an older business with good credit could more easily handle the crunch, Stankovic said.

According to documents filed Tuesday afternoon in U.S. Bankruptcy Court in Baltimore, After Six Ltd. has $13.5 million in assets and $13.2 million in liabilities. The company had more than $30 million in sales last year.

Stankovic would not give details of several options that may be available to help resolve the company's financial difficulties. Allstate Venture Capital, After Six's major creditor and 90 percent owner, would not continue to provide the needed infusion of cash. The venture capital company, owned by Allstate Insurance Co., had exchanged $12 million in debt for stock and $4 million in equity last year, and had financed the purchase of the name from the Philadelphia-based company in 1993.

Stankovic said business continued as usual yesterday, "just on a smaller scale."

It is unlikely those employees will be hired back soon, he said. A longtime employee of the company, who asked not to be identified, said some of the layoffs were not unexpected, but it "was heartbreaking to see part of your family gone."

Pub Date: 9/19/96

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