The net loss was $5.0 million, or $.14 per diluted share in the current year compared to net earnings of $2.0 million or $.05 per diluted share in 2007.

Homi B. Patel, chairman and chief executive officer of Hartmarx, commented, "The overall economic and retail environment remains very difficult and contributed to results falling far below our expectations. Consumer confidence has been unfavorable for a number of months and any discretionary spending, including the income tax rebate checks, in all likelihood is going toward higher food and gas costs rather than for discretionary apparel purchases. In addition to the current macro-economic conditions, our first half results continued to be adversely impacted by the residual effect on sales and earnings from reducing our moderate tailored clothing product offerings, including the previously announced decision not to renew the Tommy Hilfiger and Perry Ellis licenses upon their expiration at the end of 2008. In this difficult environment, we are focusing on controlling our expenses, reducing our inventories and maximizing our cash flows. We are managing our business conservatively and reducing headcount, which reflected approximately $1 million of second quarter severance charges.

While the actions taken to curtail our moderate tailored clothing lines has had a significant negative near-term impact on reported revenues and earnings, we strongly believe these actions will have a positive impact on longer-term profitability. We continue to focus on a disciplined execution of our longer-term strategies fully confident that when the economy does turn around our strong brands and emphasis on upscale products will result in significant earnings improvement. Assuming that there is no further deterioration in the economy, in the second half of the fiscal year we expect to be profitable with favorable earnings comparisons to the prior year. Accordingly, we are currently estimating full- year consolidated revenues in the range of $530 million to $550 million. Full- year diluted earnings per share is currently anticipated within a range of a breakeven to a small profit."

"At May 31, inventories of $149.9 million declined $9.2 million or 6% from the year earlier levels excluding the inventories associated with the August 2007 Monarchy acquisition. The trailing year total debt increase of $34.2 million to $147.2 million at May 31 this year reflected $47.6 million of outflows attributable to acquisitions, capital expenditures and share repurchases. To date, we have repurchased approximately 1.1 million shares pursuant to our 3 million share authorization," Mr. Patel concluded.

The second quarter revenue decline was principally attributable to the Men's Apparel Group segment, from reductions in the tailored product categories. This segment also included the Monarchy product lines which contributed $3.9 million to the current year second quarter revenues and $7.5 million for the six months. The Women's Apparel Group segment represented approximately 23% of consolidated revenues this year compared to 21% in last year's second quarter.

The second quarter operating loss was $1.8 million in 2008 compared to operating earnings of $11.2 million in 2007. The decline was principally attributable to the Men's Apparel Group segment, although the Women's Apparel Group segment earnings were also lower. The decrease reflected both the $24.5 million decline in sales and a lower gross margin rate of 33.0% for the quarter compared to 35.8% in 2007, resulting principally from the disposition of surplus inventories. Selling, general and administrative expenses for the three months were $45.6 million compared to $45.2 million in 2007 on the lower sales, representing 34.7% of sales compared to 29.0% in 2007. The current period included, among other things, $2.2 million of incremental expenses related to Monarchy and approximately $1 million of non-recurring severance charges, substantially offset by other expense reductions. Interest expense declined to $2.0 million compared to $2.6 million in 2007, reflecting lower rates as average borrowing levels were higher. The current period net loss was $1.5 million compared to net earnings of $5.4 million in last year's second quarter. This year's effective tax benefit rate reflected an income tax settlement which had an approximate $1 million favorable impact on the second quarter recorded tax benefit.

For the six months, revenues this year were $250.5 million with an operating loss of $5.4 million, compared to sales of $276.0 million and operating earnings of $7.9 million in 2007, reflecting this year's lower sales, gross margins and operating margins in both the Men's Apparel Group and Women's Apparel Group segments. The women's segment represented approximately 22% of consolidated revenues this year compared to 23% in the prior six-month period. The year-to-date gross margin rate was 33.1% this year compared to 34.8% last year, reflecting the liquidation of surplus inventories and to a lesser extent, the lower percentage of women's segment sales. Selling, general and administrative expenses for the six months of 2008 were $89.2 million compared to last year's $89.1 million on the lower sales, representing 35.6% of sales compared to 32.3% in 2007.

The current year included $3.7 million of incremental expenses associated with the Monarchy acquisition and the $1 million of non-recurring severance charges, substantially offset by other expense reductions across the Company. Year-to-date interest expense declined to $4.0 million this year compared to $4.8 million in the prior year with the decrease attributable to lower rates as average borrowing levels were higher. The year-to-date net loss was $5.0 million this year compared to net earnings of $2.0 million last year. As noted above, the year-to-date effective tax benefit rate of 46.4% compared to the prior year's effective tax rate of 37.5% reflected the favorable income tax settlement concluded in the second quarter.

Hartmarx produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Pine IV, Worn, Blue House Drive, One Girl Who..., Zooey by alice heller and b.chyll. In addition, the Company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Tommy Hilfiger, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Perry Ellis, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. -- Hartmarx Corporation