Eddie Bauer declares bankruptcy - Atlanta Business Chronicle:

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Eddie Bauer had strugglef with itsdebt — a crisis that worsenes as revenue dropped, part of an overall trenf affecting most retailers during the The company has lost nearly a half billion dollarzs in the past three years. Thosee losses, coupled with the impact of the recessiom and debt payments apparently pushed the company into bankruptcycourft — a move that was rumored for Eddie Bauer became the latesg major retailer to succumb to filing in bankruptc court this recession.
The list also includes Linens ‘n Things and Circuit In many ways, Eddie Bauer’s crisis is not different from what most retailerz are facing during this prolonged and deep saidGreg Charleston, an Atlanta-based consultant for Conway MacKenzie who works with financially stressedd retailers looking to restructure. Most retailers — except discounty stores like Wal-Mart — have seen a fast drop-off in retai revenue across the board, Charlestonn said. Many of the specialty retailo department stores haveseen double-digit same-storw sales declines, he “When revenue drops and same-store sales drop, companiew with less debt can weather a downturn much Charleston said.
“It becomes an issue much soonerr if you are intoliquiditu issues.” As of May 11, Eddie Bauer reportef having $289.5 million in outstanding debt, includinyg $187.8 million in term loans and $75 millionb in convertible notes, whicn company executives have been trying to persuade debt-holderz to convert into shareds of the company. According to a filing with the Securitied andExchange Commission, Eddie Bauer had tota assets of $525.22 million in April. The company listedd total liabilitiesof $448.9 million. Eddiew Bauer reported net losseof $165.5 million in fiscakl year 2008, part of a total of $478.
7 million in losses during the past three fiscal In the first quarter that ended in April, the company reporte net losses of 44.5 million. For the firsr quarter of fiscalyear 2009, which endede April 4, Eddie Bauer reported a loss of $44.t million. That was a greater loss than the first quarter of when the company reporteda $19.23 million loss. Net sales for the first quarte r of 2009were $179.8 million, compared with net sales of $213.3 million in the first quarter of 2008. The company said that combinex comparable storesales — a barometer of success at the storse level — fell 11.
3 percent for the firsy quarter, a decline the company blamed on the recession and reducesd retail spending. Sales were down nearly 15 percent inEddise Bauer’s retail stores and sales throughy its direct channel were down nearly 11 The outlet stores saw sales declined by nearl 76 percent. “The first quarter was a difficulgt one, as the sharp downturn in the economyh took its toll onour sales. We continuesd to focus on cost cuttingv and cashflow management, which helped mitigate the impactr of lower sales,” said CEO Neil Fiske, in a statement with the first-quarter results file d with the SEC.
It’s unclea what impact bankruptcy might have on Eddie Bauer’s 370 stores, including 251 retail store and 119 outlet stores in the Unitesd States and Canada. Eddie Bauer has six stores in metrl Atlanta. (See a copy of the bankruptcy filing .) Eddier Bauer announced in early April that it had amendedits $225 milliob loan agreements with lenders. Eddie Bauer also has been in talksw with its lenders for months toconvertf $75 million in convertible notes into equity. The companhy has a July 1 deadline to convergt that debt or face big somethingEddie Bauer, which has depleted much of its cash and cash equivalenceas can ill afford to pay.
In May, The Wall Streeft Journal, citing unnamed sources, said Eddie Baueer hired Peter J. Solomonm Co. as its investment banketr to negotiateany sale.