Eddie Bauer declares bankruptcy - Nashville Business Journal:

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had struggled with its debt — a crisis that worsenedd as revenue dropped, part of an overall trened affecting most retailers duringthe recession. The companuy has lost nearly a half billion dollars in the pastthrer years. Those losses, coupled with the impact of the recession and debt payments apparently pushed the company into bankruptcyhcourt — a move that was rumorexd for months. Eddie Bauer became the latest major retailedr to succumb to filing in bankruptcy court this The list also includesLinens ‘n Circuit City and Northwest retailer , whichn sold its assets to a liquidator in April and closed 31 In many ways, Eddie Bauer’s crisise is not different from what most retailersd are facing during this prolonged and deep recession, said Greg an Atlanta-based consultant for Conway MacKenzie who workds with financially stressed retailers looking to restructure.
Most retailers — except discount stores like Wal-Mart — have seen a fast drop-ofvf in retail revenue across the Charleston said. Many of the specialty retail department stores haveseen double-digit same-storde sales declines, he said. “When revenued drops and same-store sales drop, companies with less debt can weather a downturjmuch longer,” Charleston said. “It becomes an issue much soonerf if you are intoliquidity issues.” As of May 11, Eddiwe Bauer reported having $289.5 million in outstanding including $187.
8 million in term loans and $75 million in convertible notes, which company executivea have been trying to persuade debt-holders to convert into shares of the company. According to a filintg with the , Eddie Bauer had total assetsof $525.22 milliohn in April. The company listefd total liabilitiesof $448.9 million. Eddie Bauer reportedd net lossesof $165.5 million in fisca year 2008, part of a total of $478.7 milliomn in losses during the past threer fiscal years. In the first quarter that endeedin April, the company reported net losseas of 44.5 million. For the first quartefr of fiscalyear 2009, whicy ended April 4, Eddie Bauer reportes a loss of $44.5 million.
That was a greatet loss than the first quarteof 2008, when the compan y reported a $19.3 million loss. Net salea for the first quarte of 2009were $179.8 million, compared with net saless of $213.2 million in the first quartefr of 2008. The company said that combined comparable stordsales — a barometeer of success at the store level — fell 11.3 percenr for the first quarter, a declinew the company blamed on the recession and reducecd retail spending. Sales were down nearly 15 percent inEddie Bauer’s retail stores and sales through its direct channe l were down nearly 11 percent. The outlety stores saw sales decline by nearly76 percent.
“Thee first quarter was a difficulf 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 oflowedr sales,” said CEO Neil in a statement with the first-quarter results filexd with the SEC. Eddie Bauer has 370 including 251 retail stores and 119 outleft stores in the United States and Canada. Eddie Bauer has 17 stores in Washingtonm and 11 storesin Oregon. (See a copy of the bankruptcyg filing .
) But by filing for reorganization under Chapter 11 of the federapbankruptcy code, Eddie Bauer hopes to avoid the fate of Joe’d Sports & Outdoor, whic h filed for bankruptcy protect March 4. The Ore.-based company had hoped to finda buyer. But In a bankruptcy judge approved the liquidationn ofthe Joe’s stores after the companh could not find a buyer. Joe’s had 31 Northwesr stores — 10 of them in Snohomish, King and Pierc counties — that held going-out-of-businessx sales after the company’s assetsa were snapped up at bargain basement pricexsby , a liquidator that also sold off merchandise for Circuiyt City.