Eddie Bauer store operator files for bankruptcy, seeks sale

By Dietrich Knauth

Feb 9 (Reuters) - Eddie Bauer LLC filed for bankruptcy protection in New Jersey on Monday, beginning liquidation sales at 180 of its outdoor apparel stores in the U.S. and Canada, while keeping the door open for a buyer to acquire the company’s entire brick-and-mortar retail business.

The bankruptcy will not impact Eddie Bauer’s online sales, apparel manufacturing or wholesale sales businesses, which are owned and operated separately from the Eddie Bauer-branded retail stores. The bankrupt Eddie Bauer retail company has $1.7 billion in debt, according to its court filings.

Eddie Bauer, founded in Seattle, has sold outdoor sportswear for 106 years. It patented the first quilted down jacket, known as the "Skyliner” in 1940.

But the retail company said it has recently struggled with declining sales, supply chain challenges, inflation and business uncertainty due to unpredictable U.S. tariffs.

Similar challenges have also pushed several other apparel retailers into bankruptcy in recent months, including high-end department store conglomerate Saks Global, fast-fashion company Forever 21 and women's apparel and accessory retailer Francesca's.

The bankruptcy will help Eddie Bauer shed costs associated with operating brick-and-mortar retail stores and allow the brand to thrive in direct online sales to customers and in wholesale sales to other retailers, according to Authentic Brands, which owns Eddie Bauer’s intellectual property and is a minority owner of the store operator's parent company.

"By aligning our channel mix with how customers are choosing to shop today, we’re positioning Eddie Bauer for long-term, sustainable expansion while protecting the integrity of the brand," Authentic Brands' David Brooks said in a statement.

Authentic Brands licenses the Eddie Bauer intellectual property both to the bankrupt store operator Eddie Bauer LLP and to Outdoor 5, which is not part of the bankruptcy and manages Eddie Bauer e-commerce and wholesale operations.

The company’s lenders have agreed to support the liquidation plan, with the option to pivot to a sale of the company if a buyer can be quickly found in bankruptcy. Eddie Bauer’s retail and outlet stores will remain open during the bankruptcy sales. Eddie Bauer aims to get court approval for a potential sale by March 12, according to court filings.

Eddie Bauer previously went bankrupt in 2009.