Everett, Wash.
Published: Thursday, June 18, 2009

Struggling Eddie Bauer files for bankruptcy

Associated Press

 NEW YORK -- Struggling retailer Eddie Bauer Holdings Inc., which began as a Seattle fishing shop, later outfitted the first American to climb Mount Everest and made thousands of newfangled down jackets and sleeping bags for the military during World War II, filed for Chapter 11 bankruptcy protection on Wednesday.

Still known for outdoorsy clothing but serving a clientele of students and other mall patrons, the company said Wednesday that a bidder has agreed to keep the majority of its 371 stores open, honor its gift cards, and hold onto most employees.

The company said CCMP Capital Advisors LLC has bid $202 million in cash for its assets.

Bankruptcy rumors had been swirling as Bellevue-based Eddie Bauer struggled with slumping sales amid the recession. It reported a loss for the first quarter of $44.5 million as sales fell 16 percent to $179.8 million.

It had $476.1 million in assets and $426.7 million in debt at the time of the filing Wednesday in Delaware.

Since becoming CEO in 2007, Neil Fiske tried to turn the company around, cutting jobs and lowering expenses. But the company continued to falter as the economy soured.

"Eddie Bauer is a good company with a great brand and a bad balance sheet," CEO Fiske said in the statement. "This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction."

Eddie Bauer considered refinancing of all or some of its debt, and it considered a reorganization, sale or liquidation through Chapter 11 bankruptcy protection, as well as continued operation on a modified business plan.

It now hopes to be sold.

Founder Eddie Bauer opened the company in 1920 in Seattle. After Bauer retired, the company shifted more toward casual apparel and was bought by General Mills Inc. in 1971 and then by Spiegel Inc. in 1988. After Spiegel filed for Chapter 11 bankruptcy protection in 2003 and most of its assets were sold, the remainder of the company was reorganized in 2005 as Eddie Bauer Holdings Inc.
© 2009The Daily Herald Co., Everett, WA