Bellevue, Wash. Eddie Bauer Holdings warned that the recession had put it in jeopardy of violating some loan requirements. The company, which also posted a wider fourth-quarter loss late Wednesday, said it is at risk of violating the terms of a $225 million term loan. The chain said it quickly needed an amendment to its borrowing agreements to help assuage doubts about whether the business could keep running.
Eddie Bauer on Wednesday reported significant increases in operating and net losses in fourth quarter 2008, as well as declines in revenues and sales.
For the three months ended Jan. 3, Eddie Bauer lost $127.5 million, compared with a loss of $18.2 million a year earlier. The fourth quarter was also stung by $144.6 million in impairment charges.
Revenue fell 6% to $369.9 million from $392.4 million, as same-store sales decreased 5.7%.
Eddie Bauer's full-year loss widened to $165.5 million, from a loss of $101.7 million in the previous year. Annual sales dipped 2% to $1.02 billion, from $1.04 billion.
Eddie Bauer operated 255 stores and 121 outlet stores in the United States and Canada at the end of fiscal 2008, compared with 271 stores and 120 outlet stores at the end of fiscal 2007. It also operates catalog and e-commerce channels. The company opened eight retail and six outlet stores, and closed 24 retail and five outlet stores during 2008.