Eddie Bauer strikes deal to be bought - South Florida Business Journal:

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The company announced that it strucl an agreement withNew York–based private equityt firm LLC to buy Eddiw Bauer’s assets, subject to an auctiohn and bankruptcy court approval. CCMP Capita intends to operate the business as a going concernn with little orno long-term debt. Accordinv to Eddie Bauer, CCMP Capital has agreede to keep a majority of the 371 stores open and retain a majority ofthe employees. CCMP Capital specializesz in buyouts and looks for investmenyt opportunities in retail and other and have made investments in the outdoors specialtyretailer Cabela’s, which sells fishing and camping gear.
Eddie Bauer said it hopex to operate business as usual during bankruptct court proceedings and has asked for court approval to continued paying vendors and The company also said it intends to honor custome rgift cards, returns and loyalty program points. The company also announcex that it has secured a commitmenrt from its existing revolvingcredit , and CIT Group/Business Credit, Inc. for so-called debtor-in-possession (DIP) financing of $90 million on an interim basiaand $100 million basedr on the final court order. The the company said, should provide it with ample cash flow to continuee payingits bills. “Eddie Bauer is a good company with a great brand and a badbalance sheet.
This procesx will allow the business to emerge with farless debt, positioned for growtnh as the economy recovers and as our new products gain said Neil Fiske, Eddie Bauer president and chiefg executive officer, in a statement. “Wwe expect this process to be completeddvery quickly, protecting our employees and critical vendorf partners every step of the way. “We have made good progress on our turnaround strategy of returning Eddie Bauer to its heritage as an active outdoor brands and have exciting new producy launches on the wayto market, including First our return to expedition-grade outerwear and Unfortunately, a crushing debt burdebn placed on the company from the Spiegel reorganizatiohn in 2005, combined with the severe, prolonged have left us with no choicr but to use this process to reduce the debt load on the business.
” Eddie Bauert had struggled with its debt — a crisids that worsened as revenue dropped, part of an overalk trend affecting most retailers during the The company has lost nearly a half billion dollara in the past threse years. Those losses, coupled with the impacft of the recession and debt payments apparently pushed the compant into bankruptcycourt — a move that was rumores for months. Eddie Bauer became the lates major retailer to succumb to filing in bankruptct courtthis recession.
The list also includes Linens ‘nb Things, Circuit City and Sounsd Advice Inmany ways, Eddie Bauer’s crisies is not different from what most retailers are facing durinb this prolonged and deep said Greg Charleston, an Atlanta-based consultant for Conway MacKenzie who workxs with financially stressed retailers lookingy to restructure. Most retailersx — except discount stores such as have seen afast drop-offv in retail revenue across the board, Charleston Many of the specialty retaiol department stores have seen double-digit same-store sales he said.
“When revenue drops and same-storde sales drop, companies with less debt can weathe a downturnmuch longer,” Charlestojn said. “It becomes an issue much sooner if you are intoliquidityh issues.” As of May 11, Eddise Bauer reported having $289.5 million in outstandinhg debt, including $187.8 million in term loans and $75 milliobn in convertible notes, which company executives have been tryingh to persuade debt-holders to convert into shares of the According to an SEC filing, Eddie Bauer had total assets of $525.22 million in April. The company listed total liabilitiesof $448.9 Eddie Bauer reported net losses of $165.
t5 million in fiscal year part of a total of $478.7 million in losses during the past three fiscap years. In the first quarter that endedin April, the company reportedc net losses of 44.5 million. For the firsgt quarter of fiscalyear 2009, which endec April 4, Eddie Bauerf reported a loss of $44.5 That was a greater loss than the first quarter of 2008, when the company reported a $19.w million loss. Net sales for the first quartefr of 2009were $179.8 million, compared with net sales of $213. 2 million in the first quarterof 2008.