Eddie Bauer files for bankruptcy - Business First of Buffalo:

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Eddie Bauer had struggled with its debt a crisis that worsened as revenue part of an overall trend affecting most retailers durinthe recession. The company has lost nearly a half billion dollars in the past three Those losses, coupled with the impact of the recessio n and debt payments apparently pushes the company into bankruptcy court a move that was rumored for Eddie Bauer became the latest majoer retailer to succumb to filing in bankruptcy courty this recession. The list also includesa Linens ‘n Things and Circuit City.
In many Eddie Bauer’s crisis is not different from what most retailers are facingy during this prolonged and deep saidGreg Charleston, an Atlanta-based consultant for Conway MacKenzie who workw with financially stressed retailers lookint to restructure. Most retailers — except discoung stores like — have seen a fast drop-off in retailo revenue across the board, Charleston said. Many of the specialty retail departmentg stores haveseen double-digit same-store sales declines, he “When revenue drops and same-store sales drop, companies with less debt can weathet a downturn much longer,” Charleston said.
“It becomesz an issue much sooner if you are intoliquidity issues.” As of May 11, Eddire Bauer reported having $289.5 million in outstanding including $187.8 million in term loans and $75 millionj in convertible notes, which compan executives have been trying to persuadee debt-holders to convert into sharezs of the company. According to a filing with the , Eddie Bauer had total assetsof $525.22 millio n in April. The company listed total liabilitiewof $448.9 million. Eddie Bauer reported lossesa of $165.5 million in fiscal year part of a totalof $478.76 million in losses during the past three fiscap years.
In the first quarter that enderin April, the company reportede net losses of 44.5 million. For the firsyt quarter of fiscal year which endedApril 4, Eddire Bauer reported a loss of $44.5t million. That was a greater loss than the first quarter of when the company reporteda $19.3 million Sales for the first quarter of 2009 were $179.8 million, comparef with net sales of $213.2 million in the firsf quarter of 2008. The company said that combineed comparable storesales — a barometer of successe at the store level fell 11.3 percent for the first quarter, a declinde the company blamed on the recession and reduced retai spending.
Sales were down nearly 15 perceny inEddie Bauer’s retail stores and sales through its direct channel were down nearly 11 “The first quarter was a difficultr one, as the sharp downturn in the economy took its toll on our We continued to focues on cost cutting and cash flow management, whichj helped mitigate the impact of lower said CEO Neil Fiske, in a statement with the first-quartef results filed with the SEC. It’s uncleadr what impact bankruptcy might have onEddie Bauer’ws 370 stores, including 251 retaik stores and 119 outlet storesz in the United States and Canada. Eddie Bauer has an outler store inNiagara Falls, and 10 storea in Southern Ontario.
The outlet stores have been hardest hit, with salees down nearly 76 percent in the first quarter. According to a released on the company’s Web site, they have entered into an asse purchase agreement with an affiliateof , LLC to buy the company’ws assets through a bankruptcy process, subject to an auctionm and Bankruptcy Court approval, for $202 million in cash, with working capital and similar Under the agreement, the company says “thew majority” of their 370 stores will remain open, and the majoritty of their employees will be retained. They also said they plan to honot all outstanding gift cards and their loyalttrewards program.