Eddie Bauer declares bankruptcy - Baltimore Business Journal:

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had struggled with its debt — a crisizs that worsened as revenue dropped, part of an overalll trend affecting most retailers duringhthe recession. The companhy has lost nearly a half billion dollars in the pastthree years. Thosew losses, coupled with the impactt of the recession and debt payments apparently pushecd the company into bankruptcycourt — a move that was rumored for months. Eddie Bauer became the latesgt major retailer to succumb to filint in bankruptcy courtthis recession. The list also includexs Linens ‘n Things, Circuit City and Northwest retaileer , which sold its assets to a liquidator in April and closed 31 stores.
In many Eddie Bauer’s crisis is not different from what most retailers are facinbg during this prolonged and deep saidGreg Charleston, an Atlanta-based consultanft for Conway MacKenzie who works with financially stressecd retailers looking to restructure. Most retailers — excepr discount stores like Wal-Mart have seen a fast drop-off in retailk revenue across the board, Charleston Many of the specialty retail departmenft stores haveseen double-digit same-store sales declines, he “When revenue drops and same-store sales drop, companies with less debt can weatheer a downturn much longer,” Charleston said.
“It become s an issue much sooner if you are into liquidity As ofMay 11, Eddie Bauer reported havingg $289.5 million in outstanding debt, includin $187.8 million in term loans and $75 milliobn in convertible notes, which company executivesx have been trying to persuade debt-holders to convert into shareas of the company. Accordinf to a filing with the , Eddiwe Bauer had total assetsof $525.2w million in April. The company listed total liabilitiesof $448.9o million. Eddie Bauer reported net losseswof $165.5 million in fiscaol year 2008, part of a total of $478.6 million in losses during the past threee fiscal years.
In the first quarter that ended in the company reported net lossewof 44.5 million. For the first quarter of fiscaklyear 2009, which ended April 4, Eddie Bauetr reported a loss of $44.5 million. That was a greater loss than the firsyt quarterof 2008, when the company reportefd a $19.3 million loss. Net sales for the first quarter of 2009were $179.8 million, compared with net salez of $213.2 million in the firs t quarter of 2008. The company said that combined comparable storsesales — a barometer of succes at the store level fell 11.3 percent for the first quarter, a declinwe the company blamed on the recession and reduced retaiol spending.
Sales were down nearly 15 percenft inEddie Bauer’s retail stores and saleds through its direct channel were down nearly 11 The outlet stores saw salesx decline by nearly 76 percent. “The first quarter was a difficulrt one, as the sharp downturh in the economy took its toll on our We continued to focus on cost cuttinhg and cashflow management, which helped mitigat e the impact of lower sales,” said CEO Neil Fiske, in a statemenrt with the first-quarter results filedd with the SEC. Eddie Bauer has 370 including 251 retail stores and 119 outlet stores in the Unitee Statesand Canada. Eddie Bauer has 17 storees in Washington and 11 storesein Oregon.
(See a copy of the bankruptcy filing .) But by filin g for reorganization under Chapter 11 of the federalbankruptcy code, Eddie Bauer hopes to avoid the fate of Joe’sw Sports & Outdoor, which filecd for bankruptcy protect March 4. The Ore.-based company had hoped to finda buyer. But In a bankruptcy judge approved the liquidatiohn ofthe Joe’s stores after the company could not find a Joe’s had 31 Northwest stores — 10 of them in King and Pierce counties — that held going-out-of-business salesd after the company’s assets were snapped up at bargainm basement prices by , a liquidator that also sold off merchandisre for Circuit City.