Seven weeks after filing for bankruptcy protection, the Brooks Brothers company — and its Southwick factory in Haverhill — have found new buyers.
But a question remains: What happens to Southwick’s 413 laid-off workers?
The workers are wondering about their futures, as details are worked out involving the sales of the Brooks Brothers international menswear brand and the factory that stitches its garments.
Southwick has been purchased for $14 million by Boston-based Eastern Real Estate, according to court documents filed last week. Eastern Real Estate’s offer to buy the Southwick factory and its 21 acres in Haverhill’s Broadway Business Park was the “highest and best offer” received in bankruptcy court, the documents said. Eastern Real Estate made a deposit of $100,000 toward the Southwick purchase on June 17.
As part of the deal, Eastern Real Estate receives “all of the buildings, structures, fixtures … roadways, sidewalks, security devices, signs and light fixtures,” court paperwork said. The purchase-and-sale agreement dated July 21 made no mention of who would own the sewing machines, tools and other items used to produce garments at Southwick.
The bankruptcy court judge overseeing the sale of Southwick has ordered Eastern Real Estate to pay the city of Haverhill any money it is owed before Eastern can take ownership of Southwick, court records show. On Aug. 4, Mayor James Fiorentini made good on his promise to pursue $400,053 in tax credits, or tax breaks, Brooks Brothers received for doing business in Haverhill. The mayor filed an official claim in bankruptcy court.
Those tax breaks were given to the company when it moved to Haverhill from Lawrence several years ago.
In exchange for promising to create 70 new jobs between 2016 and 2018, Southwick was also given $2.1 million in tax breaks by the state Economic Assistance Coordinating Council. The company was also expected to retain 468 jobs as part of the agreement. Attorney General Maura Healey also has a pending claim to “claw back” that $2.1 million.
Daniel J. Doherty III, the Eastern Real Estate representative listed on the sale agreement, has not returned requests for comment as to what his company’s plans are for the Southwick property. In the past, Eastern Real Estate has redeveloped the University Station in Westwood into a mixed-use development near the Route 128 commuter rail station. The company has also purchased and flipped the U.S. Custom House in Portland, Oregon, among other projects.
The union representing Southwick’s workers said it isn’t done trying to save the factory and jobs.
While it remains to be seen what will become of the factory in Haverhill, a bankruptcy court in Delaware planned to approve the $325 million sale of all Brooks Brothers property other than the Southwick factory to a company called the SPARC Group, according to court documents.
With that court action approaching, the New England Joint Board of the UNITE HERE union sent a letter to a SPARC stakeholder asking him to consider keeping Brooks Brothers manufacturing jobs in the United States — and in particular to keep the Southwick jobs in Haverhill, even though a different company, Eastern Real Estate, is taking ownership of the Southwick factory.
“You are uniquely positioned to ensure that Brooks Brothers’ tradition of American manufacturing lives on, thereby saving the livelihoods of hundreds of skilled manufacturing workers,” the letter sent to Authentic Brands’ CEO Jamie Salter and signed by union manager Warren Pepicelli reads. “We’re confident that we can continue to provide high quality clothing for Brooks Brothers and create value for the brand. We are ready and eager to get back to work.”
SPARC Group is a partnership with brand manager Authentic Brands and mall operator Simon Property Group. As part of their deal to buy the global rights to Brooks brothers, SPARC will continue to operate at least 125 retail stores, according to a Brooks Brothers company spokesperson.
Ethan Snow, chief of staff for the UNITE HERE union, said Southwick employees are holding out hope for their jobs to remain in Haverhill.
“For the moment, we still believe the power will really lie with Authentic (Brands), especially if they retain the machinery as an asset and since they’ll be the ones deciding who manufactures the clothing for the Brooks Brothers brand,” Snow said. “If they can do that through some deal with Eastern, great. If not, we think Authentic can and should still look for ways to retain the Southwick workforce with its union contract and put people to work. They’ve done it before and they can do it again in Haverhill.”
Snow said the union sent a modified severance proposal to Brooks Brothers Wednesday.
“It showed considerable movement from our original position and we asked them to meet and discuss,” Snow said.
The union has yet to receive a response, he said
On July 24, the union was notified that Brooks Brothers would pay vacation and sick time for employees — and also extend their health care through Aug. 31. This happened after the union petitioned Attorney General Healey for assistance, Snow said.
