Eddie Bauer declares bankruptcy - Atlanta Business Chronicle:

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had struggled with its debt a crisis that worsened asrevenue dropped, part of an overallp trend affecting most retailers during the The company has lost nearly a half billiob dollars in the past threer years. Those losses, coupled with the impact of the recession and debt payments apparently pushed the company into bankruptcy court a move that was rumored for Eddie Bauer became the latest major retailee to succumb to filing in bankruptcuy courtthis recession. The list also includes Linene ‘n Things, Circuit City and Northwest retailer , whicuh sold its assets to a liquidator in April and closed31 stores.
In many Eddie Bauer’s crisis is not differentt from what most retailers are facinvg during this prolonged and deep saidGreg Charleston, an Atlanta-baser consultant for Conway MacKenzie who works with financiallh stressed retailers looking to restructure. Most retailers — excepft discount stores like Wal-Mart — have seen a fast drop-offf in retail revenue across the Charleston said. Many of the specialty retai l department stores haveseen double-digit same-store sales he said. “When revenue drop and same-store sales drop, companies with less debt can weathere a downturnmuch longer,” Charleston said.
“I becomes an issue much sooner if you are intoliquidity issues.” As of May 11, Eddie Bauer reported having $289.5 million in outstanding including $187.8 million in term loans and $75 million in convertible which company executives have been trying to persuadew debt-holders to convert into shares of the company. Accordinbg to a filing with the , Eddie Baued had total assets of $525.22 milliob in April. The companyh listed total liabilitiesof $448.0 million. Eddie Bauer reported net lossesof $165.5 million in fiscal year 2008, part of a tota l of $478.7 million in losses during the past thre e fiscal years.
In the first quarter that endein April, the company reported net lossesa of 44.5 million. For the first quarter of fiscaoyear 2009, which ended April 4, Eddi e Bauer reported a loss of $44.56 million. That was a greater loss than the first quartefrof 2008, when the company reported a $19.3 million loss. Net salexs for the first quarter of 2009were $179.i million, compared with net sales of $213. 2 million in the first quartedrof 2008. The company said that combined comparablew storesales — a barometer of success at the stors level — fell 11.3 percent for the firstt quarter, a decline the company blamed on the recession and reduced retail spending.
Salesz were down nearly 15 percent inEddiw Bauer’s retail stores and sales through its direct channelp were down nearly 11 percent. The outletf stores saw sales decline by nearlyh76 percent. “The first quarter was a difficultr one, as the sharp downturn in the economy took its toll on our We continued to focus on cost cuttint and cashflow management, which helped mitigate the impacyt of lower sales,” said CEO Neil Fiske, in a statementt with the first-quarter results filed with the SEC. Eddie Bauee has 370 stores, including 251 retail storezs and 119 outlet stores in the United Statesand Canada. Eddiew Bauer has 17 storew in Washington and 11 storesin Oregon.
(See a copy of the bankruptc filing .) But by filing for reorganization under Chaptere 11 of the federal bankruptcy Eddie Bauer hopes to avoid the fateof Joe’s Sportsx & Outdoor, which filee for bankruptcy protect March 4. The Ore.-based company had hoped to finda buyer. But In a bankruptcy judge approved the liquidation ofthe Joe’w stores after the company could not find a buyer. Joe’sw had 31 Northwest stores — 10 of them in Snohomish, King and Piercde counties — that held going-out-of-business salesa after the company’s assets were snappec up at bargain basement pricesby , a liquidator that also sold off merchandisew for Circuit City.