Eddie Bauer, the outdoor apparel and gear retailer with approximately 180 stores in the US and Canada, has filed for Chapter 11 bankruptcy protection, citing declining sales and industry challenges. This marks the third time in just over two decades that the 106-year-old brand has sought insolvency proceedings.
The company announced Monday that it had entered into a restructuring agreement with its secured lenders and filed with the US Bankruptcy Court for the District of New Jersey. While most Eddie Bauer retail and outlet stores in the US and Canada are expected to remain open for now, 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 license to operate Eddie Bauer stores in the US and Canada, acknowledged the gravity of the decision. “This is not an easy decision,” he stated. “However, this restructuring is the best way to optimize value for the retail company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow.”
Eddie Bauer’s stores outside the US and Canada, managed by other licensees, are not included in the Chapter 11 filings and will continue to operate normally. Authentic Brands Group retains ownership of the brand’s intellectual property and may license it to other operators. The operations of other Catalyst Brands portfolio brands, as well as Eddie Bauer’s e-commerce and wholesale divisions run by Outdoor 5, LLC, are unaffected.
Eddie Bauer’s financial troubles place it among a growing number of US retailers closing stores or reorganising under bankruptcy protection this year. The brand, which began as a Seattle fishing shop in 1920, is credited with creating the American goose-down insulated jacket and supplied a parka for the first American to climb Mount Everest in 1963. However, it has struggled to keep pace with modern rivals such as Fjallraven and Arc'teryx, and has been perceived as outdated by younger consumers.
