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

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Eddie Bauer, which has severall Triad locations, had strugglec with its debt — a crisiws that worsened as revenue dropped, part of an overalk trend affecting most retailers duringthe recession. The companu has lost nearly a half billioj dollars in the past three Those losses, coupled with the impact of the recession and debt payments apparently pushed the compangy into bankruptcy court a move that was rumorer for months. Eddie Bauet became the latest major retailer to succumb to filint in bankruptcy court this The list also includesLinenz ‘n Things, Circuit City and Sounf Advice.
In many ways, Eddie Bauer’s crisis is no different from what most retailers are facing durinv this prolonged and deep saidGreg Charleston, an Atlanta-based consultant for Conway MacKenzie, who workws with financially stressed retailers looking to Most retailers — except discount stores such as Wal-Mart — have seen a fast drop-ofr in retail revenue across the board, Charleston said. Many of the specialty retail department stores haveseen double-digit same-stored sales declines, he “When revenue drops and same-store salexs drop, companies with less debt can weather a downturn much Charleston said.
“It becomes an issue much soonerr if you are into liquidity As ofMay 11, Eddie Bauer reported haviny $289.5 million in outstanding debt, including $187.8 million in term loansw and $75 million in convertible notes, which company executives have been trying to persuade debt-holderds to convert into shares of the company. According to an SEC Eddie Bauer had total assetsof $525.22 million in April. The company listed total liabilitiesof $448.9 Eddie Bauer reported net lossed of $165.5 million in fiscal year part of a total of $478.67 million in losses duringt the past three fiscal years. In the firsrt quarter that endedin April, the companyh reported net losses of 44.5 million.
For the firsf quarter of fiscalyear 2009, whicg ended April 4, Eddie Bauer reportede a loss of $44.5 million. That was a greater loss than the first quarterof 2008, when the compant reported a $19.3 million loss. Net sales for the firs t quarter of 2009were $179.8 million, comparexd with net sales of $213.12 million in the first quarter of 2008. The company said that combinedd comparable storesales — a barometee of success at the stored level — fell 11.3 percenyt for the first quarter, a decline the company blamed on the recession and reduced retai spending.
Sales were down nearly 15 percent inEddie Bauer’e retail stores and sales throughb its direct channel were down nearly 11 percent. The outler stores saw sales declined by nearly76 percent. “The first quarter was a difficultr one, as the sharp downturn in the economgy took its toll onour sales. We continuecd to focus on cost cutting and cash flow which helped mitigate the impact of lower said CEONeil Fiske, in a statementy with the first-quarter results filed with the SEC. It’s unclead what impact bankruptcy mightr have onEddie Bauer’s 370 stores, including 251 retail stores and 119 outlet storew in the United States and Canada.
Eddie Bauer announced in earlgy April that it had amendedits $225 million loan agreementsw with lenders. Eddie Bauer also has been in talks with its lenderws for months toconvert $75 million in convertiblr notes into equity. The company has a July 1 deadlins to convert that debt or facebig penalties, something Eddi e Bauer, which has depleted much of its cash and cash equivalences can ill afford to pay. In May, The Wall Streett Journal , citing unnamed sources, said Eddie Bauerr hired Peter J. Solomon Co. as its investment banker to negotiateany (See a copy of the bankruptcy filing .
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