Garment Workers Plan Bid for Apparel Manufacturer Cluett

The Amalgamated Clothing and Textile Workers Union has lined up a partner and a financial adviser in an effort to buy Cluett, Peabody & Co., an apparel manufacturing concern acquired by Chicago-based Farley Inc. earlier this year.

Union President Jack Sheinkman said in an interview Monday that the union planned to make a bid through an employee ownership plan in a partnership with Spencer Hays, a Nashville, Tenn., businessman who owns several U.S. garment-making operations. “He is an employer that we have about 17 contracts with in 11 states. We have a longtime relationship,” Sheinkman said.

Sheinkman also said Merrill Lynch has been retained to help put together financing for the transaction, which could be worth as much as $500 million.

Sheinkman, on union business in Los Angeles Monday, said he met with William Farley, Farley Inc. chairman, to explain the plan and would follow up with further meetings with Farley and Cluett officials.

The union, which represents about 7,000 workers at Cluett apparel manufacturing factories, is acting to save jobs, Sheinkman said.

Neither Hays nor Farley could be reached for comment late Monday.

The union’s bid would be the largest employee buyout in the garment industry, which has been losing jobs because of foreign competition and a wave of leveraged buyouts.

Farley, which controls Fruit of the Loom Inc., said in April that his company planned to make $1.3 billion in divestitures after completing its hostile takeover of West Point-Pepperell Inc., which previously owned Cluett. Cluett owns such brands as Arrow shirts, Gold Toe socks and some of the Burberry’s and Halston lines.