Eddie Bauer Seeks Bankruptcy Protection for Third Time in Two Decades
Eddie Bauer, the iconic outdoor apparel and gear retailer with approximately 180 stores across the United States and Canada, has filed for Chapter 11 bankruptcy protection. The company cites declining sales and a range of industry challenges as primary reasons for this move, which represents the third instance of insolvency proceedings for the brand in just over twenty years.
Restructuring Agreement and Store Operations
On Monday, Eddie Bauer LLC announced it had entered into a restructuring agreement with its secured lenders, submitting the filing to the US Bankruptcy Court for the District of New Jersey. While most retail and outlet stores in the US and Canada are expected to remain open temporarily, the company will initiate a court-supervised sales process. If a buyer is not found, operations in these regions will be wound down.
Marc Rosen, CEO of Catalyst Brands—which holds the licence to operate Eddie Bauer stores in the US and Canada—acknowledged the decision's gravity. "This is not an easy decision," he stated. "However, this restructuring is the best way to optimise value for the retail company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow."
Importantly, Eddie Bauer stores outside the US and Canada, managed by other licensees, are not included in the Chapter 11 filings and will continue normal operations. Authentic Brands Group retains ownership of the intellectual property associated with the Eddie Bauer brand and may license it to other operators. Other brands within the Catalyst Brands portfolio are unaffected, as are Eddie Bauer’s e-commerce and wholesale divisions, run by Outdoor 5, LLC since February.
A Rich History and Recent Financial Woes
The brand’s origins trace back to 1920 when its namesake founder, an avid outdoorsman, established Bauer’s Sports Shop in Seattle. Eddie Bauer is credited with creating the American goose-down insulated jacket, the "Skyliner", in 1936, its first patented jacket. It also supplied James W. Whittaker with an Eddie Bauer parka for his historic ascent of Mount Everest in 1963 and produced thousands of down jackets and sleeping bags for the military during World War I.
After Bauer’s retirement in 1968 and the sale of the business, the brand shifted towards casual apparel, undergoing several ownership changes, including acquisitions by General Mills Inc. in 1971 and Spiegel Inc. in 1988. Following Spiegel’s bankruptcy in 2003, Eddie Bauer was reorganised in 2005. It filed for bankruptcy again in June 2009, was subsequently acquired by Golden State Capital, and then by Authentic Brands and SPARC Group LLC in 2021. Catalyst Brands was formed a year ago through the merger of SPARC and JCPenney.
Eddie Bauer’s latest financial struggles place it among a growing number of US retailers closing stores or reorganising under bankruptcy protection this year. High-profile examples include the parent company of Saks Fifth Avenue, which sought bankruptcy protection last month amid rising competition and significant debt, and Amazon, which recently announced the closure of most of its Amazon Go and Amazon Fresh locations to refocus on food delivery and its Whole Foods Market grocery chain.
Challenges and Market Perception
Marc Rosen noted that Eddie Bauer was already in a "challenged situation" prior to Catalyst Brands' inception. He explained that "Over the past year, these challenges have been exacerbated by various headwinds, including increased costs of doing business due to inflation, ongoing tariff uncertainty, and other factors." Despite leadership efforts to improve product development and marketing, these changes could not be implemented quickly enough to counteract years of accumulated problems.
At its peak in 2001, Eddie Bauer boasted nearly 600 stores. However, Neil Saunders, managing director of GlobalData Retail, observed that while the brand name remains "well known", it has failed to keep pace with modern rivals such as Fjallraven and Arc'teryx. He also highlighted concerns over deteriorating product quality, a critical issue for an outdoor brand, and suggested that for many younger consumers, Eddie Bauer is perceived as "somewhat old-fashioned and a bit irrelevant."
The future of Eddie Bauer now hinges on the outcome of the court-supervised sales process, as the 106-year-old pioneer navigates an increasingly competitive retail landscape.
