Our business groups. Luxury. Womenswear. Tailored. Sportswear. International

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1 luxury.everyday.

2 Overview 2

3 Our business Over 35 highly recognized brands across 5 business groups serving multiple distribution channels Growth oriented towards the luxury, bridge and better price points in both men s s and women s s products Significantly reducing investment in moderate tailored clothing sold in the mainstream department store channel More than 50% of sales in product categories other than tailored clothing Expanding and highly profitable international licensing programs 3

4 Our business groups Luxury Womenswear Tailored Sportswear International Collections from brands known for quality and timeless style: Hickey-Freeman, hickey, Bobby Jones, Hart Schaffner Marx and Burberry men s s tailored clothing. Largest U.S. premier tailored clothing manufacturer. Targeting the affluent woman who wants sophisticated yet relaxed dressing for work and play. Widening variety of product offerings. Focused on the demographic sweet spot : : 35+ years old. A narrowed and redefined offering of clothing brands marketed to diversified retail channels. A diversified portfolio of national, contemporary and dedicated brands that provide retailers with quality products with a strong fashion point of view. Growing Canadian tailored clothing collection with Custom in 7 Days expertise; expanding international licensing programs across many of our luxury and better brands. 4

5 Brands by price points MEN S WOMEN S SALES % LUXURY % 26% 21% BRIDGE/ BETTER 51% 48% 46% MODERATE/ MAINSTREAM 11% 17% 27% POPULAR 9% 9% 6% 5

6 2007 challenges 2007 was a difficult year for the stock market, the apparel and retail industry and Hartmarx Apparel wholesalers continue to address the challenges associated with: Department store consolidations, brand rationalizations and retail store closures Retailers increasing emphasis on their private label brands Most adversely affected were our licensed, tailored clothing brands marketed at moderate price points Scope and scale of changes were deeper than we anticipated Increasing demands for customer allowances, returns and price reductions Significant reduction in moderate priced tailored in-stock programs Liquidation of inventory for brands to be discontinued 6

7 Current environment 2008 Consumer and retail environment is challenging; cautious approach to first half of 2008 Continuing to exit unprofitable licenses DKNY discontinued end of 2007 Perry Ellis to conclude by end of 2008 Renegotiated minimum royalties and allowance for other programs Ongoing staff reductions in moderate tailored procurement, selling and administration areas Examining alternatives regarding under-utilized utilized distribution facility in Buffalo 7

8 2008 opportunities Significantly improved gross margins expected for full year 2008 Higher margin product mix changes already in place Adverse impact from moderate tailored clothing issues abating Benefits expected to be realized from recent acquisitions Contemporary businesses creating more avenues for sales and earnings growth E.g., Monarchy, Zooey, b.chyll 8

9 Financial overview Sales ($ in millions) Gross margin (%) 36.0% % 32.4% 32.3% 31.7% % 28.8% 30.2% % % % % 7.0% 5.0% 3.0% 1.0% -1.0% -3.0% Operating margin (%) 7.6% 5.5% 3.7% 4.0% 3.5% 0.4% $0.80 $0.60 $0.40 $0.20 $0.00 ($0.20) Diluted EPS (0.12)

10 Financial overview Cash flows from operating 58.0 activities $8.00 $ Equity per share $ $ Total debt ($ in millions) Debt to capital (%) 50.0% % 38.0% 32.0% 26.0% 40.9% 35.2% 31.5% 32.7% 30.3% 34.6% %

11 Financial overview Cash flow 2007 generated $38 million cash flow from operations, despite the e drop in earnings, principally attributable to ongoing working capital reductions $76 million of available NOL carry-forwards results in no federal tax payments over next several years Debt 2007 pro-forma debt reduction (excluding acquisitions and share repurchases): es): $21 million or 20% Debt levels have declined over the past 5 years, despite spending g $95 million for acquisitions (Misook( Misook,, Simply Blue, Sweater.com, Zooey & Monarchy) and $16 million for stock repurchases Stock repurchase Completed initial 2 million repurchase authorization in October 2007 New authorization for 3 million shares currently in place Through February 2008, we have repurchased over 1 million shares Will continue to buy opportunistically when appropriate 11

12 Growth strategies 12

13 Sales & earnings growth strategies 1. Maintain ongoing focus on luxury/upscale product mix through expansion of existing brands and appropriate acquisitions in womenswear and men s s sportswear 2. Execute prudent multi-channel and multi-product growth strategies for key legacy brands Hickey Freeman, Hart Schaffner Marx and Bobby Jones 3. Further reduce dependence on moderate priced tailored clothing by aggressively eliminating unprofitable licenses and redeploying asset investment to higher profit potential product categories and brands 4. Focus on geographical expansion that positions us as an upscale global apparel company 13

14 1. Ongoing focus on luxury/ upscale product mix Luxury and bridge/better price points represent over 80% of revenues, up from 67% just 2 years ago Sales and earnings from long standing luxury brands (Hickey Freeman, Burberry s, Bobby Jones) at record levels Taking other brands upmarket and investing in clear brand identity Hart Schaffner Marx branding moving to luxury look and image Premier repositioning of Jack Nicklaus line in golf sportswear Enhanced fixturing and imagery across brands 14

15 1. Ongoing focus on luxury/ upscale product mix 2007 acquisition of Monarchy has enhanced growth opportunities in sportswear with edgy products for contemporary men & women Continued focus on acquisitions that fit our market and financial criteria Upscale and specialty store distribution Achieves or beats internal ROI hurdles 15

16 1. Contribution of luxury/upscale womenswear New product development from businesses acquired in last few years b.chyll luxury knitwear Relevant eco-products such as the Zooey Green Line label Addition of Jag Sport line and Blue House Drive 16

17 1. Contribution of luxury/upscale womenswear Womenswear represented 23% of 2007 sales Women s s profit contribution has more than tripled in past 5 years Provided stable earning core in 2007 Acquisitions are making the difference All brands situated in upscale markets Women s sales ($ in millions, % to total) % % 14.6% 10.7% Women s EBIT ($ in 12.2 millions) %

18 2. Multi-channel/product approach for key brands Distinctive luxury niches now served by traditional Hickey Freeman brand and newer, renegade Americana hickey brand Bobby Jones expanding into new product categories Performance golf apparel Renewed collection of womenswear Increasing licensing domestically and internationally Controlled direct-to to-consumer expansion, with retail stores in key metropolitan areas, has increased brand awareness A powerful, vertically integrated structure in place incorporating wholesale, full price retail stores, outlet stores and e-e commerce 18

19 2. Multi-channel/product approach for key brands Hart Schaffner Marx strategy Brand repositioning to a more luxury oriented niche showing promising results Renewed marketing efforts have increased recognition and aided entrée e into additional upscale retailers Expanding product offering to full lifestyle collection including sportswear and dress furnishings offers additional growth opportunities Selected retail stores planned, which will better showcase the collection and its transformation New e-commerce e site provides potential for additional sales 19

20 3. Further reduce dependence on moderate tailored clothing Aggressive actions taken to reduce working capital investment and staffing levels Eliminating unprofitable licenses as they expire or through renegotiation of terms Lowering future operating costs through implementation of enhanced IT systems Expect all brands remaining at end of 2008 to be positive contributors in 2009 New head of HMX Tailored division will play an important role in reorganization Reduced working capital requirements enables redeployment to higher margin opportunities 20

21 4. Upscale global expansion Canadian tailored clothing operation streamlined under Coppley brand umbrella 11 separate brands down to one, owned collection brand also offering shirts and ties Custom in 7 days tailored clothing remains key differentiator National advertising campaign to support change 21

22 4. Upscale global expansion 11 new international licenses added under numerous key brands in 2007 Now have 57 programs in 35 countries Bobby Jones agreement for the EU, Switzerland, Turkey and South Africa Partnership in China is underway Exploring options in India 22

23 Financial Objectives 23

24 Financial objectives 2008 To achieve sales in the range of $565 to $590 million To grow EPS to between $.20 and $.35 To reduce debt on a comparable basis (excluding acquisitions, stock repurchases or dividends) by 10% 24

25 Financial objectives Long-term To achieve EPS of $.90 to $1.00 long-term Continue to grow sales and operating margins from enhanced product mix, multi-channel approach and geographical expansion To beat the three- and five-year stock market indexes 25