Eddie Bauer Holdings Inc., the nearly 90-year-old outdoor retailer with a rich history as a direct commerce merchant, filed for Chapter 11 bankruptcy protection, overcome by a heavy debt load.
A U.S. bankruptcy court judge will conduct an auction of the firm and its assets. The Bellevue, Wash., company said private-equity firm CCMP Capital Advisors LLC agreed to offer $202 million in cash for its assets during the auction, and has agreed to keep the majority of its 371 stores open, honor gift cards, and hold onto most employees.
The company said in its filing that it is seeking court protection because its financial position was creating uncertainty among its suppliers and because its cash flow problems "could severely impede" its operations.
Eddie Bauer was founded in 1920 in Seattle. The clothing retailer was bought by General Mills Inc. in 1971 and then by Spiegel Inc. in 1988. After Spiegel filed for Chapter 11 bankruptcy protection in 2003 and most of its assets were sold, the remainder was reorganized in 2005 as Eddie Bauer Holdings Inc.
CCMP specializes in buyouts and growth equity investments. Its other retail investments include Cabela's, Guitar Center, 1-800-flowers.com, Quiznos, Pinnacle Foods and Crosstown Traders.
Wednesday, June 17, 2009
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According to Multichannel Merchant magazine, Lee Helman, managing director with investment firm Financo, said that "Eddie Bauer needed to file for bankruptcy to get out from under nonperforming store leases to sell" the business.
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