BELLEVUE, Wash. — Eddie Bauer LLC, operator of Eddie Bauer retail and outlet stores in the United States and Canada, has filed for chapter 11 bankruptcy protection.
The move came on Monday after the company reached a restructuring support agreement with its secured lenders to reorganize under Chapter 11 bankruptcy protection. The agreement, filed in U.S. Bankruptcy Court in New Jersey, outlines a court-supervised process that allows Eddie Bauer to keep its roughly 180 U.S. and Canadian stores open while it pursues a sale of some or all of its retail operations or an orderly wind-down if no buyer emerges.
The company said that its online and wholesale operations will not be affected and that stores will continue to serve customers. Its e-commerce and wholesale operations are operated by Outdoor 5, LLC and are not a part of the bankruptcy.
Stores outside of the U.S. and Canada will not be affected.
Marc Rosen, CEO of Catalyst Brands, explains that declining sales, inflation, supply chain challenges, and ongoing "tariff uncertainty" are a few of the reasons why the retail company has pursued bankruptcy.
"This is not an easy decision, and we are grateful to the Retail Company’s associates and customers for their loyalty and trust. We are working to minimize the impact on the Retail Company’s employees, vendors, customers and other stakeholders. However, this restructuring is the best way to optimize value for the Retail Company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow."
What Now?
Don't panic, but do move fast. If you are a loyal Eddie Bauer shopper, here is the bottom line: The physical stores are in trouble, but the website is safe.
Immediate Impact on the Buyer:
- If you shop in-store: Expect "Going Out of Business" signs. Sales are happening, but return policies will likely vanish.
- If you shop online: Business as usual. Your orders and returns should process normally.
- If you have a Gift Card: USE IT NOW. They will accept them through March 12. Valid gift cards may only be redeemed in stores. Starting March 13, they will no longer be valid
- If you have Adventure Rewards Points: USE THEM NOW. They will be honored at closing stores through March 12.
Impact on Retail Staff (Employees):
- Effects: High Anxiety / Job Loss. While wages are being paid for now, the "wind-down" plan implies mass layoffs by spring unless a buyer steps in to save the chain.
- Action: Working at Eddie Bauer? Time to look ahead. Secure those references now, polish the resume, and check your state’s unemployment rules. Getting a head start on your next move is the best way to stay in control of your career.
Impact on Retail Space Owners:
- Effects: Landlords should prepare for unexpected vacancies. With Eddie Bauer in roughly 180 malls, new leases will likely be rejected by the end of April.
- Action: Landlords will likely need to file claims for unpaid rents, but recovering any amount may be difficult. Landlords should begin searching for new tenants in an already challenging retail environment.
How We Sourced This Article
- Primary Source: Business Wire (Press Release) - Direct from the company
- Business Context: Fox Business - Confirmed debt totals ($1.7B) and 2009 historical context.
- Mainstream Context - CBS News - Highlighted the "106-year-old" brand history and employee impact.
- Legal Context - Court Filings - Customer policies concerning rewards, refunds/exchanges and gift cards.
Comments
Post a Comment