After over a month of protests and on-again/off-again negotiations, Hugo Boss and workers at its Brooklyn, Ohio-based suit-making plant have reached an agreement that will keep the facility in business. No specifics have yet been disclosed about the new labor contract, which was ratified this morning.

To be honest, this is more than a bit shocking. When I first began covering this story last month, sources close to Hugo Boss said that the shutdown decision was final and would not be revisited. The Brooklyn, Ohio shop was profitable, they acknowledged, but not competitive in either the short or long-term (Hugo Boss does not have any other apparel factories in the U.S.). Moreover, Hugo Boss majority shareholder Permira said it would not intervene in operational decisions, despite vocal opposition to the shutdown by a number of public pension funds that serve as Permira limited partners.

FRANKFURT (Reuters) – Private equity company Permira, owner of Hugo Boss, on Thursday dismissed market talk about a possible ownership change at the German fashion house. Boss shares had risen as much as 6.5 percent as traders cited talk that the Marzotto family, co-owners with Permira of a company that holds 55 percent of Hugo [...]

Sorry for the light posting so far today, but I’ve been sidetracked by dozens of emails about my argument that Permira should tell portfolio company Hugo Boss to keep open its Ohio suit-making plant.

Specifically, I said that Permira might be making a poor financial decision for itself, in that the resulting loss of future LP commitments could exceed — or at least offset — savings generated by outsourcing the Ohio jobs to [insert your own Asian nation here].

In response, the collective you has accused me of “hypocrisy,” “populist buffonery” and of being a “raving protectionist.” Some of these attacks are accompanied by compelling dissents, so let me try to address them:

Yesterday we wrote about the pending Ohio factory closure by Hugo Boss, a publicly-traded retailer controlled by private equity firm Permira. The central issue, of course, is money.

What’s odd, however, is that Permira seems to be making a questionable financial decision.

Hugo Boss reportedly asked the workers to take a 25% pay cut from $12 to $9 and, when they refused, opted to shutter the facility and move the jobs overseas. Ohio officials tried to intervene with financial incentives, but it was too late.

When upscale men’s fashion retailer Hugo Boss decided to close its Brooklyn, Ohio plant, state officials begged controlling shareholder Permira to reconsider. Both the facility and Hugo Boss itself were profitable, they argued, and the community could hardly afford the loss of another 400 jobs.

Permira, a European private equity firm, didn’t seem to listen. And, to add insult to injury, Hugo Boss said it was still on track to pay out a special dividend.

Erin last month suggested that Permira was playing with fire:

Companies usually cite fiduciary duties in making layoffs and shutting facilities — they have an obligation to make money for their shareholders. In the case of a private equity firm, those shareholders often are pension funds, which could quite possibly include the pensions of the workers getting laid off (and subsequently, losing their pensions?).

Well, one of Permira’s investors is the Ohio Public Employees Retirement System (OPERS), which has committed approximately 160 million to a pair of Permira funds (including the one that holds Hugo Boss). It doesn’t appear that any OPERS members work at the Hugo Boss plant, but the system is still steamed with how the factory closure has been handled.

Hugo Boss, an upscale men’s apparel retailer controlled by European buyout shop Permira, recently shuttered its last remaining U.S. plant. This isn’t a struggling company lopping off a dying branch in an effort to save itself. Instead, it’s a successful company trying to save a few bucks by shopping Rust Belt jobs to Eastern Europe.

Not the best way to improve private equity’s battered image.

First, both the plant and publicly-listed Hugo Boss are profitable. Moreover, Permira increased the company’s dividend in 2008, and added €750 million in new debt to pay a special dividend.

FRANKFURT, Oct 30 (Reuters) – German fashion house Hugo Boss (BOSG_p.DE: Quote, Profile, Research, Stock Buzz) slashed its 2008 forecasts on Thursday, citing a decline of retail sales in important regions, and reported a decrease in nine-month operating profit. Hugo Boss, which sells luxury clothes wear and accessories, lowered its forecast for full-year sales growth [...]