Eddie Bauer Files for Bankruptcy, then Agrees to Buy-out
Hurt by a big reduction in sales and burdened by overwhelming debt payments, Seattle-based Eddie Bauer Holdings, Inc. (Nasdaq: EBHI) filed June 17 for bankruptcy protection. It then took only a day for the troubled outdoor retailer to be grabbed by a NY-based private equity firm, CCMP Capital Advisors LLC.
CCMP has agreed to take over Eddie Bauer in a $202 million deal. CCMP plans to eliminate most of Eddie Bauer’s long-term debt, and has pledged to keep most of the retailer’s 371 stores open. According to Eddie Bauer representatives, CCMP will retain the majority of Eddie Bauer employees.
Until the deal is finalized, Eddie Bauer will operate under Bankruptcy rules. Eddie Bauer said it hopes to operate business as usual during bankruptcy court proceedings and has asked for court approval to continue paying vendors and workers. The company also said it intends to honor customer gift cards, returns and loyalty program points. In its bankruptcy filing with the U.S. Securities and Exchange Commission, Eddie Bauer Holdings Inc. declared total assets of $525.22 million in April vs. total liabilities of $448.9 million.
The Eddie Bauer company was started in 1920 by Eddie Bauer, an avid outdoorsman (and former stock boy). His business grew rapidly when he offered an “unconditional guarantee”, something very rare at the time. Bauer called his guarantee “his creed” and it became a cornerstone of the Eddie Bauer business.
History of Eddie Bauer Business.
