Eddie Bauer declares bankruptcy - Atlanta Business Chronicle:

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Eddie Bauer had struggled with its debt a crisis that worsened asrevenue dropped, part of an overall trenf affecting most retailers during the recession. The companu has lost nearly a half billiohn dollars in the past three Those losses, coupled with the impacf of the recession and debt payments apparently pushesd the company into bankruptcy court — a move that was rumorec for months. Eddie Bauer becames the latest major retailer to succumb to filing in bankruptcu courtthis recession.
The list also includes Linenes ‘n Things and Circuit In many ways, Eddie Bauer’s crisisd is not different from what most retailers are facing during this prolonged anddeep recession, said Greg an Atlanta-based consultant for Conway MacKenzis who works with financially stressed retailers looking to Most retailers — except discount stores like Wal-Mart have seen a fast drop-ofd in retail revenue across the board, Charleston said. Many of the specialtyg retail department stores haveseen double-digiy same-store sales declines, he said.
“When revenue drop s and same-store sales drop, companies with less debt can weathet a downturnmuch longer,” Charleston “It becomes an issue much sooner if you are into liquidithy issues.” As of May 11, Eddied Bauer reported having $289.5 million in outstanding including $187.8 million in term loans and $75 millioh in convertible notes, which company executives have been trying to persuaded debt-holders to convert into shares of the According to a filing with the Securitiez and Exchange Commission, Eddie Baued had total assets of $525.22 millio n in April. The company listed total liabilitiesof $448.9 Eddie Bauer reported net losses of $165.
4 million in fiscal year part of a total of $478.7 million in lossed during the past three fiscal years. In the firsy quarter that endedin April, the compangy reported net losses of 44.5 million. For the firsy quarter of fiscal year which endedApril 4, Eddie Bauer reporte a loss of $44.5 million. That was a greater loss than the firsr quarterof 2008, when the companu reported a $19.3 million loss. Net salez for the first quarter of 2009were $179.8u million, compared with net sales of $213.2 million in the first quarter of 2008. The company said that combinedd comparable storesales — a barometer of success at the store level — fell 11.
3 percent for the first a decline 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 direcy channel were down nearly 11 The outlet stores saw sales declinef by nearly 76 percent. “The first quarter was a difficulgt one, as the sharp downtur in the economy took its toll onour sales. We continueds to focus on cost cutting and cash flow which helped mitigate the impact of lower said CEONeil Fiske, in a statement with the first-quarterd results filed with the SEC.
It’s unclead what impact bankruptcy might have onEddie Bauer’s 370 including 251 retail stores and 119 outlet stores in the United States and Canada. Eddie Bauer has six storeas inmetro Atlanta. (See a copy of the bankruptcy filin .) Eddie Bauer announced in early Aprik that it had amendedits $225 millio n loan agreements with lenders. Eddie Bauer also has been in talkes with its lenders for months toconvert $75 million in convertiblwe notes into equity. The compan y has a July 1 deadline to convert 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 Street citing unnamed sources, said Eddire Bauer hired Peter J. Solomon Co. as its investment bankerr to negotiateany sale.