June 4, 2008
Hartmarx Deals with Change
By Tom Ryan
Hartmarx Corp., the owner of Hickey-Freeman and Hart Schaffner Marx, has continually reinvented itself during difficult times over its 129-year history. But Homi Patel, the company’s long-time CEO, says the most productive changes only came through gradual steps.
“When we recognized the times were changing, that an economic model was broken, and we made drastic changes, we failed,” Mr. Patel said recently at the “Keeping/Gaining Market Share in Difficult Times” seminar in New York City sponsored by Emanuel Weintraub Associates. “But when we recognized the problems and made some changes, tweaked here and there, but didn’t ignore or make revolutionary changes, we succeeded.”
As an example, Mr. Patel noted that Hartmarx currently has no retail stores but once owned about 500 in 1990. At the time, management noticed the advent of the Italian influence in men’s clothing but did nothing.
“We had a lot of people in our company who used phrases like, ‘Stick to your knitting,’ ‘Stand for who you are’ and we made no changes,” said Mr. Patel. “And there are a lot of reasons why our retail business failed. But I think one of the main reasons was we recognized in that men’s clothing was changing and that the Italian influence was becoming dominant and chose to do nothing.”
On the other hand, management noticed about a decade ago that men’s clothing was being impacted by business casual and dress down trends. As a result, Hartmarx gradually moved away from being nearly 100 percent reliant on tailored clothing by shedding businesses and building others through acquisitions and organic means. Now, about 54 percent of Hartmarx’s business is in women’s wear, sportswear, golf wear and other non-tailored categories.
Although Hartmarx continues to tweak its approach in marketing and product development, Mr. Patel said it’s essential during difficult times to reinvest in core brands.
“We have two brands that are over 100 years old, but they didn’t stick around by serendipity,” noted Mr. Patel. “Somebody was constantly investing and reinvesting in those brands over decades, even in tough times. So while we’re all for new products and new ideas; if you don’t invest in your core brands, none of the rest will work.”
At the same time, Mr. Patel said it’s equally important to watch the competition, especially as they develop new capabilities.
“Find ways to change the terms of the competition, change them in your favor by creating asymmetry of strategy and remember the timeframe to hurt the competitor is finite,” he said. “If you think you can wait around and analyze and paralyze yourself, it’s not going to happen. Someone’s going to run away with that opportunity.”
Discussion Questions: What factors should dictate whether a company should stay the course, make a minor change, or make a major change? Do you find most companies tend to be overly cautious or overly aggressive in regards to implementing changes within an organization?
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It’s always important to stay ahead of your competition. Simply keeping up with your competition is a necessity. Gaining a competitive edge is what will keep customers coming back and grow your market share. Doing that requires vision. That’s the hard part and that varies from company to company. Analyzing your competition on a regular basis, watching their successes and failures is a good place to start.
“Playing small does not serve the world” writes the incredible Marianne Williamson. And my friend Daniel Burrus, arguably the world’s best technology and marketing forecaster says: “The biggest danger facing corporations today is that they’ll change but not transform.”
We live in a quantum world, not a Newtonian one. One human brain is capable of 10,000 trillion operations per second and has double the memory of the world’s largest computer–approximately 100 terabytes equivalent to 102,400 one gigabyte laptops. And all we can do is tiny incremental change? Come on people…if we think small we’ll see small outcomes.
What I’m finding in my work is that when organizations set their minds and hearts on “infinite possibilities,” incredible things begin to happen almost supernaturally. One company is growing at over 40% when the industry average is in the low single digits. I am absolutely convinced that one of the prime causes of failure is that goals are too low.
This does not mean you just foolishly leap off a cliff–it takes equally bold planning and decision-making. When we change how we think, we’ll change the results we see.
What a weird speech by Homi Patel. Did anyone understand it? “[When] we made drastic changes, we failed.” “[When we] didn’t make revolutionary changes, we succeeded.” BUT, “If you think you can wait around and analyze and paralyze yourself, it’s not going to happen.” AND, “[When Hartmarx chose to] stick to your knitting [and] stand for who you are [and] made no changes [and] chose to do nothing, [their] retail business failed.” So, Homi, you recommend both moving quickly and not moving quickly. You also recommend waiting and not waiting. Huh?
This doublespeak may pass for wisdom in a convention setting where most of the listeners are more concerned about their tee times, but on the printed page it’s just meaningless. I won’t even get into “changing the terms of competition in your favor by creating asymmetry of strategy and remembering the timeframe to hurt the competitor is finite.” What time is lunch?
Change needs to be dictated by the changing needs and expectations of the existing customer base, as well as by opportunities created by potential new customers. Responding to the existing customer base is hard enough, but it takes vision to truly understand how an existing brand might have meaning for new, younger customers as they enter the target demographic.
Hartmarx’s experience is one such example, in the apparel industry. Another that I’ve dealt with is in the garden center industry. The challenge for that industry is to continue to grow as older customers shift their spending into other areas, and younger, first time homeowners come into the market. These younger customers came of age in a completely different environment than their predecessors. For the garden center industry, as for the home center industry, the challenge is to become relevant to customers who are much more accustomed to spending their disposable income in categories and with retailers such as Best Buy.
Hartmarx, mostly made in the USA, has also suffered from the Macy-fication of America. Hartmarx was a huge supplier of quality men’s suits to Marshall Field’s stores for decades. While certainly businessmen wear and buy fewer suits than in the past due to the trend toward office casual, there was still a large market for traditionally styled well made suits here in the Midwest, such as those manufactured by Hartmarx.
By all accounts Hartmarx’s loss of business was rather abrupt when Macy’s came to town, and replaced them with allegedly trendier import suits. Of course, no one I know who was a regular suit buyer at Field’s has purchased a suit at Macy’s for almost two years.
Could Hartmarx have foreseen and been better prepared for when Macy’s kicked Marshall Field’s (and them) to the curb? Hard to say.
I was pleased to see the comments by Homi Patel about Hartmarx; I was their VP of Consumer Research during the periods he describes. Their move into retail was based on sound logic, but it eventually became the tail that wagged the dog. Their exit from retail was similarly well thought out.
Hartmarx is very well aware of the images that their brand collections evoke. They try and maneuver within the upper price/quality tier to create profitable collections. It’s a pretty small pool though, and probably not getting bigger.
If anything, the company suffers from a clear and long standing consumer understanding of what their brands stand for. It’s doubtless that “Hart, Schaffner & Marx” pretty much defines the “interview suit.” It’s a big shadow to get out from under.
Interestingly, they are opening something like 400 or more “Hart Schaffner & Marx” stores in China–only 1 or 2 here. Given the relative strength of the dollar and America’s persistent drift away from dress clothing it’s no wonder the Hartmarx international division does well.
Hartmarx got out of retailing. Then they got profitable. So they passed the IQ test that so many other retailers fail. There are too many struggling retailers in America. Too many marginally profitable me-too stores in agony. Too many just barely able to survive. Too many just able to honor their suppliers’ bills (late). It just doesn’t pay to waste time and energy if year after year things look grim, with no basic change likely. Every day, every business person should ask, “Knowing what I know today, would I want to go into this business? What’s my likely profit? Is this worth the effort?”
Change in the business world is constant. Smart companies are always evolving. They constantly review their core stories (why they are in business, what they do and for whom, their values and their goals) and update their priorities. To remain in one place or resist change is to stagnate. And to stagnate is to allow competitors to define the marketplace without you.
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It’s always important to stay ahead of your competition. Simply keeping up with your competition is a necessity. Gaining a competitive edge is what will keep customers coming back and grow your market share. Doing that requires vision. That’s the hard part and that varies from company to company. Analyzing your competition on a regular basis, watching their successes and failures is a good place to start.
“Playing small does not serve the world” writes the incredible Marianne Williamson. And my friend Daniel Burrus, arguably the world’s best technology and marketing forecaster says: “The biggest danger facing corporations today is that they’ll change but not transform.”
We live in a quantum world, not a Newtonian one. One human brain is capable of 10,000 trillion operations per second and has double the memory of the world’s largest computer–approximately 100 terabytes equivalent to 102,400 one gigabyte laptops. And all we can do is tiny incremental change? Come on people…if we think small we’ll see small outcomes.
What I’m finding in my work is that when organizations set their minds and hearts on “infinite possibilities,” incredible things begin to happen almost supernaturally. One company is growing at over 40% when the industry average is in the low single digits. I am absolutely convinced that one of the prime causes of failure is that goals are too low.
This does not mean you just foolishly leap off a cliff–it takes equally bold planning and decision-making. When we change how we think, we’ll change the results we see.
What a weird speech by Homi Patel. Did anyone understand it? “[When] we made drastic changes, we failed.” “[When we] didn’t make revolutionary changes, we succeeded.” BUT, “If you think you can wait around and analyze and paralyze yourself, it’s not going to happen.” AND, “[When Hartmarx chose to] stick to your knitting [and] stand for who you are [and] made no changes [and] chose to do nothing, [their] retail business failed.” So, Homi, you recommend both moving quickly and not moving quickly. You also recommend waiting and not waiting. Huh?
This doublespeak may pass for wisdom in a convention setting where most of the listeners are more concerned about their tee times, but on the printed page it’s just meaningless. I won’t even get into “changing the terms of competition in your favor by creating asymmetry of strategy and remembering the timeframe to hurt the competitor is finite.” What time is lunch?
Change needs to be dictated by the changing needs and expectations of the existing customer base, as well as by opportunities created by potential new customers. Responding to the existing customer base is hard enough, but it takes vision to truly understand how an existing brand might have meaning for new, younger customers as they enter the target demographic.
Hartmarx’s experience is one such example, in the apparel industry. Another that I’ve dealt with is in the garden center industry. The challenge for that industry is to continue to grow as older customers shift their spending into other areas, and younger, first time homeowners come into the market. These younger customers came of age in a completely different environment than their predecessors. For the garden center industry, as for the home center industry, the challenge is to become relevant to customers who are much more accustomed to spending their disposable income in categories and with retailers such as Best Buy.
Hartmarx, mostly made in the USA, has also suffered from the Macy-fication of America. Hartmarx was a huge supplier of quality men’s suits to Marshall Field’s stores for decades. While certainly businessmen wear and buy fewer suits than in the past due to the trend toward office casual, there was still a large market for traditionally styled well made suits here in the Midwest, such as those manufactured by Hartmarx.
By all accounts Hartmarx’s loss of business was rather abrupt when Macy’s came to town, and replaced them with allegedly trendier import suits. Of course, no one I know who was a regular suit buyer at Field’s has purchased a suit at Macy’s for almost two years.
Could Hartmarx have foreseen and been better prepared for when Macy’s kicked Marshall Field’s (and them) to the curb? Hard to say.
I was pleased to see the comments by Homi Patel about Hartmarx; I was their VP of Consumer Research during the periods he describes. Their move into retail was based on sound logic, but it eventually became the tail that wagged the dog. Their exit from retail was similarly well thought out.
Hartmarx is very well aware of the images that their brand collections evoke. They try and maneuver within the upper price/quality tier to create profitable collections. It’s a pretty small pool though, and probably not getting bigger.
If anything, the company suffers from a clear and long standing consumer understanding of what their brands stand for. It’s doubtless that “Hart, Schaffner & Marx” pretty much defines the “interview suit.” It’s a big shadow to get out from under.
Interestingly, they are opening something like 400 or more “Hart Schaffner & Marx” stores in China–only 1 or 2 here. Given the relative strength of the dollar and America’s persistent drift away from dress clothing it’s no wonder the Hartmarx international division does well.
Hartmarx got out of retailing. Then they got profitable. So they passed the IQ test that so many other retailers fail. There are too many struggling retailers in America. Too many marginally profitable me-too stores in agony. Too many just barely able to survive. Too many just able to honor their suppliers’ bills (late). It just doesn’t pay to waste time and energy if year after year things look grim, with no basic change likely. Every day, every business person should ask, “Knowing what I know today, would I want to go into this business? What’s my likely profit? Is this worth the effort?”
Change in the business world is constant. Smart companies are always evolving. They constantly review their core stories (why they are in business, what they do and for whom, their values and their goals) and update their priorities. To remain in one place or resist change is to stagnate. And to stagnate is to allow competitors to define the marketplace without you.