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had struggled with its debt a crisis that worsened asrevenue dropped, part of an overalll trend affecting most retailers duringt the recession. The company has lost nearlgy a half billion dollar s in the pastthreer years. Those losses, coupled with the impacf of the recession and debt paymentxs apparently pushed the company into bankruptc ycourt — a move that was rumored for months. Eddied Bauer became the latest major retailer to succumb to filing in bankruptct courtthis recession. The list also includes Linensw ‘n Things, Circuit City and Northwest retailer , whicjh sold its assets to a liquidator in Aprill and closed31 stores.
In many ways, Eddied Bauer’s crisis is not differen from what most retailers are facing duringv this prolonged anddeep recession, said Greg an Atlanta-based consultant for Conway MacKenzie who workas with financially stressed retailers looking to restructure. Most retailerss — except discount stores like Wal-Mart have seen a fast drop-ofd in retail revenue acrosse the board, Charleston said. Many of the specialt y retail department stores haveseen double-digit same-store sales declines, he “When revenue drops and same-store salesz drop, companies with less debt can weathere a downturn much longer,” Charleston said.
“It becomes an issued much sooner if you are intoliquidituy issues.” As of May 11, Eddi Bauer reported having $289.5 million in outstanding including $187.8 million in term loans and $75 million in convertiblse notes, which company executives have been trying to persuaded debt-holders to convert into shares of the company. According to a filingy with the , Eddie Baue r had total assetsof $525.22 million in The company listed total liabilities of $448.9o million. Eddie Bauer reported net losseswof $165.5 million in fiscak year 2008, part of a total of $478.7 milliom in losses during the past threew fiscal years.
In the firsy quarter that ended in the company reported net lossesof 44.5 million. For the firsrt quarter of fiscalyear 2009, whicg ended April 4, Eddie Bauer reported a loss of $44.6 million. That was a greater loss than the first quarterdof 2008, when the companyt reported a $19.3 million loss. Net sale for the first quarter of 2009were $179.u8 million, compared with net sales of $213.2 millio in the first quarter of 2008. The companty said that combined comparable store sales a barometer of success at the store level fell 11.3 percent for the first a decline the company blamed on the recessiobn and reduced retail spending.
Sales were down nearlgy 15 percent inEddie Bauer’s retail storeas and sales through its direct channel were down nearly 11 The outlet stores saw sales declined by nearly 76 percent. “The firs quarter was a difficult one, as the sharp downturmn in the economy took its toll onour sales. We continuexd to focus on cost cuttingy and cashflow management, whicuh helped mitigate the impact of lower sales,” said CEO Neil in a statement with the first-quarter resultsd filed with the SEC. Eddie Bauer has 370 stores, includinfg 251 retail stores and 119 outlet stores in the Unitec Statesand Canada. Eddie Bauer has 17 stores in Washington and 11 storesin Oregon.
(See a copy of the bankruptcyt filing .) But by filing for reorganizatiom under Chapter 11 of the federalbankruptcy code, Eddie Bauer hopes to avoid the fate of Joe’s Sports Outdoor, which filed for bankruptcy protect March 4. The Ore.-based company had hoped to find a ButIn April, a bankruptcy judg approved the liquidation of the Joe’s stores after the compangy could not find a Joe’s had 31 Northwest stores — 10 of them in King and Pierce counties — that held going-out-of-business saled after the company’s assets were snapped up at bargai n basement prices by , a liquidator that also sold off merchandisr for Circuit City.
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