Redmond, Wash Eddie Bauer Holdings Inc. became the latest casualty of the recession when it filed for Chapter 11 bankruptcy protection on Wednesday.
As part of the filing, the company has an agreement to sell its assets to private-equity firm CCMP Capital Advisors LLC for $202 million in cash. CCMP has agreed to keep most of the stores and employees, though the sale is open to other bidders per bankruptcy law.
Eddie Bauer said it secured financing from Bank of America and CIT Group/Business Credit for a total $100 million based on final court order. It blamed a “crushing” debt load and the recession for the filing.
“This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction," said Neil Fiske, CEO of Eddie Bauer.
The filing, made in U.S. Bankruptcy Court in Delaware, is the second bankruptcy for the outdoor-clothing company. The retailer emerged from Chapter 11 bankruptcy in 2005 after its former owner, Spiegel Catalog, sought bankruptcy protection in 2003.
Eddie Bauer has been posting losses on falling sales this year. In January, the company hired investment banking firm Peter J. Solomon Co. for restructuring advice, and it has been working to cut costs and preserve cash.
The company, whose 371 stores remain open for business, said last month its first-quarter revenue fell 16% to $179.8 million.