Hartmarx Buys Monarchy
Chicago-based Hartmarx Corp. has acquired Los Angeles–based premium-denim and sportswear brand Monarchy for $12 million. Hartmarx, which produces men’s suits under the Hart Schaffner & Marx and Hickey-Freeman labels, has sought to lessen its dependence on men’s tailored apparel and recently focused on buying contemporary labels with diversified distribution channels. In 2006, Hartmarx purchased Santa Monica, Calif.–based Sweater.com, maker of the B. Chyll and One Girl Whohellip; cashmere sweater lines, and Zooey, a line of luxury T-shirts for men and women.
For its latest acquisition, Hartmarx set its sights on Southern California’s premium-denim market, said Homi Patel, chairman and chief executive. “Monarchy seemed to be the best fit for us. It has a very interesting business and it is in a very interesting stage,” Patel said.
Monarchy, which debuted in 2005 with men’s premium denim and has evolved to include sportswear for men and women, sells at more than 800 upscale specialty stores nationwide. Sales at the company, which was founded by Eric and Henry Kim, have tripled from 2005 to 2006, Patel said. A release from the company estimated Monarchy’s annual sales could reach $20 million this year and will contribute $25 million to $30 million in revenues to Hartmarx in 2008.
With burgeoning sales and expanding category offerings, Monarchy is at a delicate stage, Patel said. “They will need a lot of support and help, mostly in things like finance, IT and sourcing. We’ll work with them to help reinforce these areas.” With the inflow of money and support, Hartmarx is expecting to see Monarchy expand its brands as Sweater.com and Zooey did this year. “We are encouraging them to expand their line organically,” Patel said.
Eric Kim said in a statement that the possibilities for growing the brand include increased international distribution, licensing and the creation of additional brands. Both founders have signed seven-year contracts to remain with Monarchy and continue to lead the brand. Still, Eric Kim is already working on other projects, including Cohesive, a preppy new men’s line, with designer David Appel. Set to debut at Project Global Trade Show in Las Vegas, the denim-influenced brand is independent of Monarchy and features wholesale price points of $55–$80 for denim and $22–$90 for T-shirts, knits and jackets. —Erin Barajas
