Eddie Bauer files for bankruptcy - The Business Journal of the Greater Triad Area:

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Eddie Bauer had struggled with its debt a crisis that worsened asrevenue dropped, part of an overal l trend affecting most retailers durinbg the recession. The company has lost nearl y a half billion dollars in the pastthrees years. Those losses, coupled with the impact of the recessiobn and debt payments apparently pushed the company into bankruptcucourt — a move that was rumored for months. Eddie Bauedr became the latest major retailer to succumb to filinfg in bankruptcy courtthis recession. The list also includeds Linens ‘n Things and Circuit City.
In many ways, Eddied Bauer’s crisis is not different from what most retaileras are facing during this prolonged anddeep recession, said Greg Charleston, an Atlanta-basefd consultant for Conway MacKenzie who works with financiallty stressed retailers looking to restructure. Most retailers except discount storeslike — have seen a fast drop-off in retailp revenue across the board, Charleston said. Many of the specialtg retail department stores haveseen double-digit same-store salees declines, he said. “When revenue dropsd and same-store sales drop, companies with less debt can weathee a downturnmuch longer,” Charleston said.
“Igt becomes an issue much sooned if you are intoliquidity issues.” As of May 11, Eddied Bauer reported having $289. million in outstanding debt, includinb $187.8 million in term loans and $75 million in convertiblse notes, which company executivesd have been trying topersuadse debt-holders to convert into shares of the company. According to a filing with the , Eddie Bauer had total assets of $525.22 million in The company listed total liabilitiesof $448.9 million. Eddie Bauedr reported losses of $165.5 milliomn in fiscal year 2008, part of a totalo of $478.7 million in losses during the past thresfiscal years.
In the first quarter that endefin April, the companu reported net losses of 44.5 million. For the firs t quarter of fiscalyear 2009, whichh ended April 4, Eddie Bauer reported a loss of $44.r million. That was a greater loss than the firsft quarterof 2008, when the company reportedd a $19.3 million loss. Sales for the firsr quarter of 2009were $179.8 million, comparedr with net sales of $213.2 million in the firsg quarter of 2008. The company said that combinesd comparable store sales a barometer of success at the store level fell 11.
3 percent for the first a decline the company blamed on the recession and reduced retail Sales were down nearly 15 percent in Eddie Bauer’z retail stores and sales through its direct channel were down nearly 11 “The first quarter was a difficulgt one, as the sharp downturnm in the economy took its toll on our We continued to focus on cost cutting and cash flow which helped mitigate the impact of lower sales,” said CEO Neil in a statement with the first-quarter resultas filed with the SEC. It’s unclear what impact bankruptcy migh have onEddie Bauer’s 370 stores, including 251 retail storee and 119 outlet stores in the Unitecd States and Canada.
Eddie Baue r has an outlet store inNiagarqa Falls, and 10 stores in Southern The outlet stores have been hardest hit, with sales down nearlu 76 percent in the first quarter. According to a release on the company’z Web site, they have entered into an assegt purchase agreement with an affiliateof , LLC to buy the company’x assets through a bankruptcy subject to an auction and Bankruptcy Court for $202 million in cash, with workingt capital and similar adjustments. Under the agreement, the company says “the majority” of their 370 storez will remain open, and the majority of their employeews willbe retained.
They also said they plan to honort all outstanding gift cards and their loyaltyrewards