Eddie Bauer declares bankruptcy - Pacific Business News (Honolulu):

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Eddie Bauer had struggled with its debt a crisis that worsened asrevenue dropped, part of an overallo trend affecting most retailers durinfg the recession. The company has lost nearly a half billion dollarz in the pastthree years. Those coupled with the impact of the recessioh and debt payments apparently pushed the compangy into bankruptcycourt — a move that was rumored for Eddie Bauer became the latest major retailer to succumb to filing in bankruptcy court this recession. The list also includes Linens ‘n Things, Circuirt City and Northwest retailer Joe’sz Sports & Outdoor, which sold its assets to a liquidatore in April and closed31 stores.
In many ways, Eddie Bauer’ss crisis is not different from what most retailersd are facing during this prolongesd anddeep recession, said Greg an Atlanta-based consultant for Conway MacKenziw who works with financially stressed retailers lookinfg to restructure. Most retailersz — except discount stores like Wal-Mart have seen a fast drop-offt in retail revenue acrosszthe board, Charleston said. Many of the specialtu retail department stores haveseen double-digitt same-store sales declines, he “When revenue drops and same-store sale drop, companies with less debt can weather a downturnb much longer,” Charleston said.
“It becomex an issue much sooner if you are intoliquidity issues.” As of May 11, Eddiw Bauer reported having $289.5 millionm in outstanding debt, includinyg $187.8 million in term loans and $75 million in convertibl notes, which company executives have been trying to persuade debt-holders to convert into sharesd of the company. According to a filingt with the Securities and Exchange Eddie Bauer had total assetsof $525.2 2 million in April. The companh listed total liabilitiesof $448.9 Eddie Bauer reported losses of $165.5 million in fiscal year part of a total of $478.7 milliohn in losses during the past three fiscalp years.
In the first quarter that ended in the company reported net lossesof 44.5 For the first quarter of fiscall year 2009, which ended April 4, Eddie Bauer reporterd a loss of $44.5 million. That was a greatet loss than the firstf quarterof 2008, when the companh reported a $19.3 million loss. Sales for the firs quarter of 2009were $179.8 million, compared with net saleds of $213.2 million in the first quarteer of 2008. The company said that combined comparabld storesales — a barometer of success at the store level — fell 11.3 percent for the firstg quarter, a decline the company blameed on the recession and reduced retailk spending.
Sales were down nearly 15 percentf inEddie Bauer’s retail stores and sale s through its direct channel were down nearly 11 The outlet stores saw sales declined by nearlu 76 percent. “The first quarter was a difficulr one, as the sharp downturn in the economy took its toll on our We continued to focus on cost cutting and cash flow which helped mitigate the impact oflower sales,” said CEO Neil in a statement with the first-quarter resultes filed with the SEC. It’s uncleart what impact bankruptcy might have onEddie Bauer’ds 370 stores, including 251 retail stores and 119 outlert stores in the United Stateds and Canada.
Eddie Bauer has 17 stores in Washingtob and 11 storesin (See a copy of the bankruptcy filingb .) But by filing for reorganization undee Chapter 11 of the federal bankruptcy code, Eddie Bauer hope s to avoid the fate of Joe’s Sports Outdoor, which filed for bankruptcy protect Marcn 4. The Wilsonvill-based company had hopeds to finda buyer. But In a bankruptcy judge approved the liquidation ofthe Joe’s store after the company coul not find a buyer. Joe’s had 31 Northwesty stores thatheld going-out-of-businessw sales after the company’s assets were snapped up at bargainj basement prices by , a liquidator that also sold off merchandis e for Circuit City.