Blog: Eddie Bauer back from the brink?
Leonie Barrie | 22 June 2009
It has been a dramatic week for outdoor apparel retailer Eddie Bauer, which finally filed for bankruptcy protection after struggling for years with mounting debts and falling sales.
However, in a dramatic move the company immediately announced a proposed sale to private equity group CCMP Capital Partners for $202m in a so-called "stalking horse" bid, which could yet be matched or beaten by rival bidders.
Business is continuing as usual while the sale goes through thanks to interim financing from its current lenders of $90m, plus $100m to meet its ongoing requirements. This means all 371 stores will remain open as usual, and vendors and contractors will be paid.
"Eddie Bauer is a good company with a great brand and a bad balance sheet," said Neil Fiske, company president and CEO. The filing and sale have raised hopes this will mark a fresh start for an iconic name.
Just as expected there have also been changes at teen clothing retailer Abercrombie & Fitch, which is to shutter its struggling Ruehl chain after deciding to focus on its other brands. The decision comes a month after the retailer launched a strategic review of Ruehl, which caters to post-college adults – and will see the chain’s 29 stores and related direct-to-consumer operations close by the end of the fiscal year.
The renewed auction of the assets of Filene's Basement has seen rival cut-price apparel retailer Syms emerge as the winner. Syms' US$62.4m joint bid with developer Vornado Realty Trust covers the leases for 23 Filene's Basement stores, along with the defunct company's trade name, inventory and distribution centre. Men's Wearhouse had originally been declared the winning bidder, but the auction was reinstituted after complaints from rivals.
In a major coup for fashion chain H&M, it is partnering with celebrity favourite footwear and accessory brand Jimmy Choo to launch a new collection in 200 of the retailer's stores around the world. The collaboration is particularly exciting because it is H&M's first shoe designer collection. It will also include bags plus a selection of women's clothing.
And finally, a row has broken out between rival US industry groups over whether US Customs and Border Protection is adequately enforcing trade laws affecting textile and apparel imports. The National Retail Federation is urging Congress to resist political pressure from the textile industry, which claims illegal textile fraud levels have reached record highs.
The textile executives want to see an overhaul the textile enforcement effort in trade deals such as CAFTA (Central American Free Trade Agreement), while retailers argue tougher tariff enforcement for apparel imports would penalise legitimate importers.
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