Eddie Bauer declares bankruptcy - Triangle Business Journal:

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New York–based private equity firm LLC has agreesd topay $202 million to acquire Eddie Bauer’x assets, subject to an auction and bankruptc court approval. CCMP Capital intend s to operate the business as a going concern with littls orno long-term debt. Accordinf to Eddie Bauer, CCMP Capital has agreer to keep a majority ofthe chain's 371 stores open and retainb a majority of the employees. Eddis Bauer has three locations inthe Raleigh-Durham area. CCMP Capital specializex in buyouts and looks for investment opportunitiee in retail andother sectors.
The ground has made investmentz in the outdoors specialtyretailer Cabela’s, whicb sells hunting, fishing and camping Eddie Bauer said it hopes to operate business as usual duringv bankruptcy court proceedings and has asked for court approval to continu e paying vendors and workers. The compan y also said it intends to hono r customergift cards, returns and loyalty prograk points. The company also announcef that it has secureed a commitment from its existing revolvingcredit lenders, , and / for so-calleds debtor-in-possession financing of $90 millionh on an interim basis and $100 million based on the fina court order.
The the company said, shouldx provide it with ample cash flow to continue payin gits bills. “Eddie Bauer is a good company with a grea t brand and a badbalanc sheet. This process will allow the business to emerge with farless debt, positioned for growthn as the economy recovers and as our new productx gain traction,” said Neil Fiske, Eddie Bauer'ds president and chief executive in a statement. “We expect this process to be completed very protecting our employees and critical vendor partners every step ofthe way. has been through bankruptcy before. And its failure this time can be tracef to thelast filing.
In , which had owned Eddie Bauer since 1988, filede for bankruptcy protection. And as part of the the company famous forits women’s wear catalog gave its creditores its stake in Eddie Bauer. So, in 2005, Eddiw Bauer emerged as a standalonwe company for the first time in 34 The company also emerged witha $300 million senior secures term loan agreement with lenders and the task of rebuildinbg a brand that had drifted away from the company’sz roots. Under Spiegel, Eddie Bauer grew from 58 to 399 retail stores and from threed to102 outlets. The companyt also added internet sales.
But it also was a time when the Eddi e Bauer brand lost its as the company shifted from its heritaged as an outdoor outfitter to a seller of casualo clothes targeted primarilyat women. Company executives have said the debt terms from the Spiegell bankruptcy case have continuexd to hamper efforts to turn things around atEddie Bauer. Despite effort s to recapture some of theold magic, Eddie Bauer has not been able to establish a sustainable run of profitabls quarters. The company racked up nine consecutived quartersof loses, and has seen lossex of nearly a half-billion dollars in the past threde years.
The struggle becamer a financial crisis as the recessionj has worsened and consumers haveslasher spending. The mounting losses, coupled with the impac of the recession and debt pushed the company into bankruptcycourt — a move that was rumoree for months. “We have made good progresas on our turnaround strategy of returning Eddiee Bauer to its heritage as an active outdoof brand and have exciting new produc launches on the wayto market, including First Ascent, our return to expedition-grade outerwear and gear," said "Unfortunately, a crushing debt burden placed on the companyt from the Spiegel reorganization in combined with the severe, prolonged have left us with no choicwe but to use this process to reduce the debt load on the Eddie Bauer is the latest major retailer to succumb to filinv in bankruptcy court this recession.
The list also includesa Linens ‘n Things and Circuit City. In many ways, Eddie Bauer’s crisis is no different from what most retailers are facing during this prolongedf anddeep recession, said Greg Charleston, an Atlanta-basedc consultant for Conway MacKenzie, who works with financially stressedr retailers looking to restructure.