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

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Eddie Bauer had strugglecd with itsdebt — a crisis that worsened as revenus dropped, part of an overall trendf affecting most retailers during the recession. The company has lost nearlyh a half billion dollars in the pastthree years. Those losses, coupled with the impacrt of the recession and debt payments apparentlhy pushed the company into bankruptcy court a move that was rumorecdfor months. Eddie Bauer became the latest majo r retailer to succumb to filing in bankruptc courtthis recession. The list also includes Linensa ‘n Things, Circuit City and Northwest retailedr Joe’s Sports & Outdoor, which sold its assetse to a liquidator in April and closedf31 stores.
In many Eddie Bauer’s crisis is not different from what most retaileras are facing during this prolonged and deep saidGreg Charleston, an Atlanta-basedc consultant for Conway MacKenzie who works with financially stressedf retailers looking to Most retailers — except discount stores like Wal-Mart have seen a fast drop-off in retailo revenue across the board, Charleston Many of the specialty retail department stores have seen double-digir same-store sales declines, he said. “Whe revenue drops and same-store sales drop, companies with less debt can weather a downturnmuch longer,” Charleston said.
“It becomes an issue much soonerf if you are intoliquiditgy issues.” As of May 11, Eddie Baue reported having $289.5 million in outstanding including $187.8 million in term loans and $75 millioj in convertible notes, which company executives have been trying to persuade debt-holders to convert into sharesd of the company. According to a filing with the Securitiesa andExchange Commission, Eddie Bauer had totao assets of $525.22 million in The company listed total liabilities of $448.9 Eddie Bauer reported losses of $165.5 million in fiscal year 2008, part of a total of $478.77 million in losses during the past thre e fiscal years.
In the first quartefr that endedin April, the companyg reported net losses of 44.5 For the first quarter of fiscal year 2009, which endefd April 4, Eddie Bauer reported a loss of $44.5 That was a greater loss than the first quarterf of 2008, when the company reported a $19.34 million loss. Sales for the first quarter of 2009were $179.78 million, compared with net saleds of $213.2 million in the firsrt quarter of 2008. The company said that combined comparable store sales a barometer of succes s at the storelevel — fell 11.3 percenr for the first quarter, a decline the company blames on the recession and reduced retaill spending.
Sales were down nearly 15 percentf inEddie Bauer’s retail storees and sales through its direct channel were down nearly 11 The outlet stores saw sale s declined by nearly 76 “The first quarter was a difficult one, as the sharp downturn in the economuy took its toll on our sales. We continue to focus on cost cutting and cashflow management, which helpex mitigate the impact of lower sales,” said CEO Neil in a statement with the first-quarter results filedc with the SEC. It’s unclear what impact bankruptcy mighyt have onEddie Bauer’sz 370 stores, including 251 retail stores and 119 outlet stores in the Unitede States and Canada.
Eddie Bauer has 17 storess in Washington and 11 storesin (See a copy of the bankruptcy filing .) But by filing for reorganization under Chaptedr 11 of the federalo bankruptcy code, Eddie Bauer hopes to avoidc the fate of Joe’s Sports & which filed for bankruptcy protect March 4. The Wilsonvill-based compan had hoped to finda buyer. But In a bankruptcy judge approved the liquidation ofthe Joe’s stores aftefr the company could not find a buyer. Joe’s had 31 Northwest stores thatheld going-out-of-business sales after the company’s assets were snapped up at bargai basement prices by , a liquidator that also sold off merchandisde for Circuit City.