‘Enough was enough’ :

Allan Jones conflicted about decision to sell Hardwick Clothes

By TIM SINIARD
Posted 1/19/20

As local businessman Allan Jones sold the venerable Hardwick Clothes last month, he felt conflicted about what he had accomplished during his ownership.

In one way, he saved the clothing …

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‘Enough was enough’ :

Allan Jones conflicted about decision to sell Hardwick Clothes

Posted

As local businessman Allan Jones sold the venerable Hardwick Clothes last month, he felt conflicted about what he had accomplished during his ownership.

In one way, he saved the clothing manufacturer from bankruptcy when he purchased the floundering company 2014, saving 215 jobs at the time.

Hardwick was founded by C.L. Hardwick in Cleveland in 1880 and remains the oldest manufacturer of tailor-made clothing in the United States.

But in another way, he was frustrated by the inability to compete with foreign-owned clothing manufacturers.

“I saved the company and saved a lot of jobs and accomplished what I want to accomplish by taking it to a new level,” he said. “But frankly, the problem is we just couldn’t compete with cheap prices from overseas.”

Last month, in a surprise announcement, Jones sold Hardwick Clothes to Puerto Rican Industries for the Blind – or PRIFB Corporation, which is a privately held company based in Mayaguez, Puerto Rico. The company’s mission is to train and employ people with severe disabilities, enabling them to achieve their economic independence.

PRIFB is best known for designing and manufacturing uniforms and equipment for the United States government and military.

Jones retained ownership of the building that houses the plant, as well as the surrounding acreage. As a result, PRIFB is leasing the site.

Although Jones said in the initial announcement that he was 67 years old and starting to slow down, he remains actively involved in all business matters of his various companies, which include Check Into Cash and Jones Properties.

He can manage his businesses from anywhere, from his office at Jones Properties, his home office in Cleveland home or even from his house in Florida.

“I just use my iPad and iPhone, and I can stay in touch. It's amazing,” Jones told the Cleveland Daily Banner during an interview via FaceTime. “I even talk to them just like this during board meetings.”

Jones said he was able to increase the quality of Hardwick’s product line, as well as raise price points, by using Italian-made fabric.

“I wanted better quality so people would pay more,” Jones said.

When he purchased the company, he said he thought its problem was a sales-related issue. However, there were more problems facing the company: competition from overseas companies, tariffs, expenses related to medical insurance premiums and labor.

“It wasn’t a sales problem; it was a really a manufacturing problem,” he said.

Jones said the challenges facing Hardwick weren’t limited to his company; all of Hardwick’s competitors were experiencing problems of their own.

“Our main competitors, Hickey Freeman and Hart Shaffner & Marx are both struggling,” Jones said. “I mean … they're really struggling. It’s not just Hardwick; it’s the whole industry.”

One expense that affected profitability, Jones said, was the Affordable Care Act, also known as Obamacare.

“Under Obamacare, Janie [Jones’s wife] and I were taking $1 million a year out of our savings account and paying the insurance premium,” he said.

Although Jones was injecting the company with cash infusions, the employees still had to meet the $3,000 deductible, while most were making just $11 per hour.

“Workers were hardly able to even use that type of policy, although the law required them to have it,” he said. “The company was generating $9 to $10 million a year, and 10% of my total cost was insurance that really didn't have any value to them.”

Tariffs also bedeviled the company.

“When the Italians make a suit, they ship the suit over here tariff-free, but if they ship me the material for me to make the suit, I have to pay a 25% tax on that tariff.”

Canadian clothing manufacturers are having an easier time than ones in the United States, according to Jones.

“The Canadians are able to order the same Italian fabric directly without paying the 25% tax,” Jones said.

Jones also mentioned the North American Free Trade Agreement.

“Ross Perot was wrong about one thing,” Jones said. “He said there was going to be a sucking sound [as jobs go south of the border]. For this industry, they went to Canada.”

Employee issues also plagued the company.

“When we tried to go from 30 hours a week to 40 hours a week, we had a lot of pushback with our employees because they were getting all these government benefits,” Jones said. “The benefits were WIC, free cell phones … the Earned Income Tax credit was a huge one. They were getting back $2,000 to $3,000 more than they paid in.”

The conflict over working hours was never resolved.

“We got a lot of pushback, not wanting to work full-time,” he said. “Mr. Hardwick [the company’s founder] never faced those issues.”

Still, Jones kept trying to turn things around at the company by bringing in industry talent.

“I brought in all the the best people I could find,” he said. “The executive vice president of Hart Shaffner & Marx came in to be our president; the chief engineer at Southwick Clothing came in to be our engineer; the vice president of manufacturing for Hickey Freeman came in to be our vice president of manufacturing. I also hired the top salesman from Marx.”

In addition, Jones hired Ken Hoffman, who was president of Hart Shaffner & Marx, to serve as chairman.

"I resigned as chairman, and he replaced me,” Jones said. “He put his own money into it, and even he couldn't get it turned around.”

Jones said he stepped away from day-to-day operations.

“I backed out.  I went two years without darkening the door to make sure I was completely out of the way,” Jones said. “But Hoffman did a great job finding a buyer for it,” Jones said.

Jones said he is proud of the product they manufactured at Hardwick, particularly its navy blazer.

“I guess my proudest thing is that I created the best navy blazer you could make, and we did we did,” he said. “It’s the finest Italian navy blazer. It won an award."

In 2015, Garden & Gun Magazine named Hardwick Clothes as the Style-category winner for its sixth annual “Made in the South Awards.”

The awards celebrate Southern craftsmen making products in six categories: food, drink, style, outdoors, home and crafts.

The “Made in the South” blazer is made of the same fine Italian cloth found in the most high-end menswear collections and features a custom Bemberg jacquard lining for comfort,” according to an article previously published in the Cleveland Daily Banner.

“I designed every inch of that blazer,” Jones said. "Even the buttons were designed by me … everything."

On regrets, Jones said he has a few.

"I didn't follow my own hunches,” he said. “My original hunch when I bought the company was to be the first factory to go direct to the internet. I just thought I could make some changes. I thought their problem was a sales issue, and I could fix that.”

He also said he was unable to pay more in wages.

“We really needed to be paying more money, but the market wouldn't allow us to pay more,” Jones said. “I'd never dealt with wage rates like at Hardwick.”

Still, he complimented the skill and dedication Hardwick employees have to their jobs.

"They have one lady who has been there for 50 years, and her daughter works there, and her granddaughter works there,” Jones said.

The dedication and commitment employees have to the company convinced Jones to keep trying.

“When I think about people like that who have dedicated their life to it, I couldn't quit,” he said. “I think if it didn't have any sentimental value, you would quit earlier, but we were able to stay in there and save the company.”

Almost to the end, Jones thought they could improve the company’s market position and profitability. It was not to be.

“I kept drawing a new line in the sand thinking I could get it turned around, but we never really moved the needle that much,” he said.

He eventually decided it was time to sell.

“I’d just about had enough,” Jones said. “Enough was enough.”

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