Plaid Clothing Group Inc. said yesterday that it will close its administrative center in Owings Mills, costing up to 50 jobs, because the company needs to cut out the duplication between its local staff and a bigger administrative center in Ohio as part of plans to emerge from bankruptcy court protection.
Plaid, which on July 17 filed for bankruptcy court protection from creditors while it attempts to reorganize its finances, is the holding company that owns the old J. Schoeneman Inc. Schoeneman makes suits, raincoats and other tailored men's clothing under licenses from recognized designers such as Burberry's, Halston and Nicole Miller.
"It's one of those darn difficult decisions in a business that has the downward trends that we did," Plaid Chief Executive Officer Richard C. Marcus said. Makers of dressier menswear have been hammered throughout much of the 1990s, first by the recession and later by the trend toward more casual dress in many offices.
"It's another tragic loss of jobs for Maryland, as far as the apparel industry is going," said Alan Millstein, a New York retailing consultant who publishes the Fashion Network Report. "You had probably the worst two years since the end of the Second World War. It's not a reflection of the economy, it's a reflection of the crisis in the apparel industry."
Mr. Marcus said the local office was cut because most of Plaid's operations in areas like customer service, product planning and finance that were handled in Owings Mills were smaller than similar departments in Cincinnati. He said the duplicate offices stayed open so long because they had differing information systems left over from before Plaid was formed in 1991, when it bought Schoeneman before buying another apparel company in 1992.
"It has been sort of moving toward this ending for a long time," he said. He said only a handful of the people in Owings Mills are being offered jobs in Ohio. "Most of the folks there are not those who could or would move."
The cuts in Owings Mills are part of a broader reappraisal at rTC Plaid, which said in its bankruptcy filing that it has assets of $195 million and liabilities of $177 million.
Mr. Marcus said the company has also cut one-quarter of its 56-member New York staff and is considering rejecting some of the licenses that commit the company to manufacturing certain designers' clothes. He would not say which designers might be dropped.
Plaid was shrinking Schoeneman's Maryland presence even before the filing. It closed a 110-worker Schoeneman raincoat plant in Bel Air last year and decided to move a 55-person warehouse from Owings Mills to Chambersburg, Pa.
Mr. Millstein said Plaid's bankruptcy was made certain by its failed campaign to acquire a bankrupt Italian clothing manufacturer, Gruppo Finanziaro Tessile GFT SpA, which cost Plaid $15 million.