Blog: Leonie BarrieBauer bid rejected

Leonie Barrie | 9 February 2007

The decision by Eddie Bauer shareholders to reject a $280m sale of the company to a pair of buyout firms is a surprising one. After all, the deal on the table to take the troubled outdoor apparel company private offered US$9.25 a share, plus the assumption of about $328m in debt.

Management now have the unenviable task of continuing to operate Eddie Bauer on a standalone basis, and deciding whether to take on more debt or refinance existing debt on unfavourable terms. They’ll also have to stump up another $5m to cover the expenses of failed bidders Sun Capital Partners and Golden Gate Capital. And then there’s the small matter of performance to think about: net merchandise sales have declined since 2000, and same-store sales have fallen in 23 of the previous 27 quarters. In 2006, sales slid by 4.5%, with net merchandise sales dropping 4.5% to US$957m.

Against this background, surely a sale would have been a preferable option? Maybe shareholders still have faith in the brand and a management team that has so far failed to execute a turnaround. Or maybe the knowledge that president and CEO Fabian Mansson stood to pocket around $10.8m in stock payments and other benefits was enough to sway the vote against the new buyers.

Eddie Bauer shareholders reject takeover bid


BLOG

just-style market research sale

Are you planning for the year ahead and beyond? Well this week we’re offering great deals on some of our market research......

BLOG

Gearing up for the holiday shopping season

The volume of US apparel imports saw an increase in October on the prior year as retailers geared up for the holiday shopping season. Bangladesh booked the second highest growth behind India, reversin...

BLOG

Innovations to boost sustainability

Hong Kong-based textile and apparel giant Esquel Group, the world's largest woven shirt maker, is pushing ahead with the pursuit of sustainable and holistic quality. ...

BLOG

Sign up to try new re:source apparel sourcing tool for free

The old saying "Good things come to those who wait" is certainly true for re:source, the new suite of data-driven sourcing tools being developed by the team here at just-style....

just-style homepage



Forgot your password?