Hartmarx Corp., the Chicago-based clothing manufacturer that is struggling to return to profitability, has stopped accepting the American Express card.
Hartmarx no longer accepts the card at 205 of its stores with higher-price merchandise, a spokesman confirmed Wednesday. Among the Hartmarx chains not honoring the cards are Wallachs in New York, Baskins and Barrie Pace Ltd. in Chicago and Jas. K. Wilson in Texas. A company spokesman said the affected stores book $400 million of sales annually.
Hartmarx said its decision was based on ”a financial need” to cut costs. The company reported a loss of $61.5 million in fiscal 1991 and is de- emphasizing its retail business.
”We feel certain that it has not impeded our business,” the spokesman added. The policy has been in effect since November. Its stores continue to accept MasterCard, Visa, Discover, Diners Club and their own private-label cards, the spokesman said.
American Express has stirred a revolt among some merchants because it charges as much as 5 percent of a transaction to process card billings, compared with a high of about 4 percent assessed by MasterCard or Visa.
Analysts said Hartmarx`s problems underscore the difficulty American Express has in marketing its high-price cards as status symbols in a slow economy. Indeed, American Express said Tuesday that cardholder and charge-card volume growth was flat in 1991.
”Consumers and retailers are questioning the need for American Express and the value of American Express,” said Michael Auriemma, a credit card consultant in Garden City, N.Y. ”There are definitely some problems there.” Merchant revolts against American Express have largely been limited to restaurants and the direct-mail industry. But last month American Express dropped Laura Ashley from its merchant roster after the British-based retailer encouraged its customers to use rival credit cards.
American Express, for its part, contends that its merchant network grew 7.6 percent last year. It said Tuesday that more than 3.5 million service establishments accept the company`s cards.
However, its domestic cardholders dipped to 25.8 million at year`s end from 25.9 million at the end of 1990. The company also reported that charge-card volume worldwide remained flat, at $111 billion.
Visa International and MasterCard International will not release their 1991 results until February. But based on figures through the third quarter, observers predict they will report roughly 5 to 8 percent domestic growth in sales volume and cardholders.
