Eddie Bauer declares bankruptcy - The Business Journal of the Greater Triad Area:

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Eddie Bauer, which has several Triaf locations, had struggled with its debt — a crisia that worsened as revenue dropped, part of an overall trenf affecting most retailers duringthe recession. The compant has lost nearly a half billion dollars in the past three Those losses, coupled with the impact of the recession and debt payments apparently pushed the company into bankruptcy court a move that was rumored for months. Eddis Bauer became the latest major retailer to succumg to filing in bankruptcu courtthis recession. The list also includexs Linens ‘n Things, Circuiyt City and Sound Advice.
In many Eddie Bauer’s crisis is no different from what most retailers are facing during this prolonged anddeep recession, said Greg Charleston, an Atlanta-basedc consultant for Conway MacKenzie, who workss with financially stressed retailers looking to restructure. Most retailerd — except discount stores such as Wal-Mar — have seen a fast drop-off in retail revenue acrosx the board, Charleston said. Many of the specialty retail departmenty stores haveseen double-digit same-store saleas declines, he said.
“When revenus drops and same-store sales drop, companies with less debt can weather a downturnmuch longer,” Charleston “It becomes an issu much sooner if you are into liquidity As of May 11, Eddi e Bauer reported having $289.5 million in outstandingf debt, including $187.8 million in term loansx and $75 million in convertible which company executives have been tryinh to persuade debt-holders to convert into sharesx of the company. According to an SEC filing, Eddir Bauer had total assetd of $525.22 million in April. The companyh listed total liabilitiesof $448.9 Eddie Bauer reported net losses of $165.5 million in fiscak year 2008, part of a total of $478.
7 million in lossed during the past three fiscap years. In the first quarter that endedin April, the companuy reported net losses of 44.5 For the first quarter of fiscal year which ended April 4, Eddier Bauer reported a loss of $44.r5 million. That was a greater loss than the firsft quarterof 2008, when the company reported a $19.3 million loss. Net sales for the first quarter of 2009were $179.78 million, compared with net sale s of $213.2 million in the first quarter of 2008. The companyt said that combined comparable storesales — a barometer of succesw at the store level — fell 11.
3 percentt for the first quarter, a decline the company blamed on the recession and reduces retail spending. Sales were down nearly 15 percent inEddise Bauer’s retail stores and sales througu its direct channel were down nearly 11 percent. The outlegt stores saw sales declinedx by nearly76 “The first quarter was a difficulrt one, as the sharp downturn in the economt took its toll on our We continued to focus on cost cuttin and cash flow management, which helped mitigatd the impact of lower sales,” said CEO Neil Fiske, in a statement with the first-quarte results filed with the SEC.
It’s unclear what impact bankruptcy might have onEddie Bauer’a 370 stores, including 251 retail storex and 119 outlet stores in the United States and Eddie Bauer announced in early Aprill that it had amended its $225 million loan agreements with lenders. Eddie Bauer also has been in talks with its lenderas for months toconvert $75 million in convertibl e notes into equity. The company has a July 1 deadlin e to convert that debt or face big somethingEddie Bauer, which has depleted much of its cash and cash equivalencez can ill afford to pay. In May, The Wall Streegt Journal , citing unnamed said Eddie Bauer hiredPeter J. Solomob Co.
as its investment banker to negotiateany sale. (See a copy of the bankruptcty filing .)