NEW YORK — Clothing retailer Eddie Bauer Holdings Inc. filed for Chapter 11 bankruptcy protection on Wednesday, the latest retail casualty of the recession.
The New York-based retailer said CCMP Capital Advisors LLC has bid for its assets. Other buyers may also make bids while the company is under court protection.
The company said in its filing that it is seeking court protection because its financial position was creating uncertainty among vendors that supply its inventory and because its cash flow problems “could severely impede” its operations.
The longtime business, which specializes in outdoor active wear and accessories, opened a Red Deer store in Bower Place Shopping Centre late in 2007. It also has three outlets in Calgary and four in Edmonton.
Eddie Bauer said it might not be able to comply with some covenants in its US$225 million senior debt or have the cash under its line of credit to make vendor payments in the future.
Eddie Bauer considered refinancing of all or some of its debt, and it considered a reorganization, sale or liquidation through Chapter 11 bankruptcy protection, as well as continued operation on a modified business plan. It now hopes to be sold.
“All of the company’s operations are open and conducting business as usual, including in Canada,” said Wendi Kopsick, a spokesman for Eddie Bauer.
However, the company does not have a domestic subsidiary, and operates out of Seattle, she added.
The outdoorsy clothing retailer had $476.1 million in assets and $426.7 million in debt at the time of the filing Wednesday with the United States Bankruptcy Court of the District of Delaware.
Bankruptcy rumours had been swirling as Bellevue, Wash.-based Eddie Bauer struggled with slumping sales amid the recession. It reported a loss for the first quarter of $44.5 million.
Eddie Bauer joins Circuit City, Linens N Things, Mervyns and other U.S.-based retail chains that have filed for bankruptcy court protection as consumer spending fell and the recession continued.
Eddie Bauer has about 1,100 employees and operates about 370 stores in the United States and Canada. In Canada, the company operates 36 retail stores, 14 of them in Ontario.
The company also has a distribution centre north of Toronto that employs 23 people and a call centre in Saint John, N.B.
— with files by Advocate staff