After more than three decades, Eddie Bauer is coming home. Spiegel, which has owned the 85-year-old outdoor-apparel retailer since 1988...
After more than three decades, Eddie Bauer is coming home.
Spiegel, which has owned the 85-year-old outdoor-apparel retailer since 1988, is expected to emerge from bankruptcy in mid-June.
Under its reorganization plan, approved yesterday by a U.S. bankruptcy judge in New York, Spiegel will transfer its stake in Eddie Bauer to the newly formed parent company Eddie Bauer Holdings.
The new parent — owned by Spiegel’s creditors — will operate Eddie Bauer’s 400-plus stores in the United States and Canada, plus its catalog and Web site from Redmond.
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A collection of roughly six banks, led by Commerzbank, will own the largest chunk — 45 percent — of Eddie Bauer Holdings. Fabian Månsson will remain its chief executive.
“I have always said that the Eddie Bauer brand and the Eddie Bauer name are still vital and important,” said business author Robert Spector, who wrote a book about the iconic outdoorsman.
“That’s what this group is counting on.”
Downers Grove, Ill.-based Spiegel filed for Chapter 11 in March 2003. The company sold its Spiegel catalog and Newport News units to Pangea Holdings last year.
It put Eddie Bauer up for sale but failed to receive what it deemed a fair offer.
Spiegel opted instead to reorganize around its profitable division — a plan that returned 91 cents on the dollar to creditors. Part of the plan goes before Canadian courts tomorrow for approval.
The new company will shutter its 31 Eddie Bauer Home stores in the second half of the year to focus on its core apparel and accessories business. It plans to trade its shares on the Nasdaq Stock Market, although a timeline has not been set for its debut.
Spector said the company’s biggest challenge will be to come up with compelling products that reflect its heritage so that “the consumer understands that Eddie Bauer knows the outdoors.”
“It can’t be just a me-too, one-more-polo-shirt-in-a-mall” retailer, Spector said. “They really need to stop talking about going back to the roots and go back to the roots.”
Eddie Bauer opened a small sports shop in downtown Seattle in 1920. The avid outdoorsman was known to display large, spectacular trout in the window to attract passers-by.
Bauer is perhaps best known for inventing the down parka after developing hypothermia on a winter fishing trip in 1923.
He sold the “Skyliner” in 1936, the first commercially available quilted, down-filled jacket. Jim Whittaker wore an Eddie Bauer down jacket when he climbed Mount Everest in 1963, according to HistoryLink.org.
Bauer sold the company in 1968 to friend and business partner William Niemi. Three years later, Niemi sold the company to General Mills.
Spiegel purchased Eddie Bauer in 1988, running it as a subsidiary along with its collection of mail-order catalogs.
When Spiegel filed for bankruptcy in 2003, analysts attributed the financial woes to huge losses in Spiegel’s credit-card business and noted the Eddie Bauer brand no longer had the cachet to charge premium prices in the casual-apparel market.
Spiegel’s bankruptcy offered the first close look at Eddie Bauer in more than a decade. The numbers surprised those who believed Eddie Bauer was on life support.
Excluding taxes and reorganization costs, Eddie Bauer earned $108 million in 2004, up from $102 million in 2003. Sales dipped to $1.24 billion from $1.42 billion the year before.
The financial disclosures made it easier for the company to attract experienced senior management, Månsson said at the time the figures were disclosed.
In the past year, it has hired vice presidents that headed departments for J. Crew, Tommy Hilfiger and Ann Taylor.
The company, meantime, appointed a nine-member board of directors Friday, headed by William End, the former chairman and CEO of Cornerstone Brands, a family of catalog companies.
Monica Soto Ouchi: 206-515-5632 or email@example.com