Outerwear retailer Eddie Bauer Holdings has received Bankruptcy Court approval for its sale to private equity firm Golden Gate Capital for US$286m in cash.

With the court's approval, the transaction is on track to close in early August.

A statement said the sale will "enable Eddie Bauer to emerge quickly from bankruptcy as a new company positioned for success". The statement also said there would be substantially lower cost structureto strengthen the balance sheet.

"Golden Gate has indicated its support for Eddie Bauer's management team and its strategy, including operating as a tri-channel retailer with an extensive store fleet. Golden Gate plans to maintain the substantial majority of Eddie Bauer's stores and employees in the newly formed company," it added.

News that Golden Gate had won a bankruptcy auction for the retailer broke last week.