Longstanding outdoor apparel retailer Eddie Bauer is reportedly on the brink of a significant restructuring that could see the closure of its entire network of physical stores across North America. According to industry reports, the brand's retail operator is preparing to file for Chapter 11 bankruptcy protection, a move that would impact approximately 200 brick-and-mortar locations.
Retail Operator Catalyst Brands Prepares for Bankruptcy
The potential bankruptcy filing involves Eddie Bauer's retail operations, which are owned by Catalyst Brands. This entity was formed last year through a collaboration between major players Simon Property Group, Brookfield Corp., Authentic Brands Group, and Shein. Catalyst Brands manages a portfolio that includes several well-known names such as Lucky Brand, Aéropostale, Nautica, Brooks Brothers, and JCPenney, alongside Eddie Bauer.
Manufacturing and E-commerce Operations to Continue Unaffected
Importantly, a Chapter 11 filing would not disrupt Eddie Bauer's manufacturing, e-commerce, and wholesale activities in the United States and Canada. These operations are currently in the process of being transferred from Catalyst Brands to a new licensee. Last month, a deal was announced to move Eddie Bauer's operations to Outdoor 5, a global brand development and licensing platform. The bankruptcy filing is expected to occur once this transfer is finalised.
The proposed restructuring would also leave untouched the remaining twenty Eddie Bauer stores operating in Japan, according to the report. The Independent has contacted both Catalyst Brands and Outdoor 5 for official comment regarding the situation.
A Century-Old Brand with a Turbulent Financial History
Eddie Bauer holds a cherished position in the outdoor industry, with a heritage spanning over a century. The brand's founder, Eddie Bauer, is historically credited with inventing the first quilted down jacket, securing a patent for the innovation in 1940. However, the company's ownership has changed multiple times since its founder sold the business in 1968.
This would not be the first time Eddie Bauer has sought bankruptcy protection. The retailer has previously filed for Chapter 11 on two separate occasions. In 2003, its then-parent company, Spiegel Inc., initiated bankruptcy proceedings, leading to the closure of numerous stores. The brand emerged from this in 2005 after restructuring into an independent entity named Eddie Bauer Holdings Inc.
Previous Bankruptcies Driven by Debt and Economic Pressures
Subsequently, in 2009, Eddie Bauer Holdings Inc. filed for Chapter 11 protection again. This filing was attributed to substantial debt burdens, declining sales, and the severe economic stressors of the recession at that time. Following this second bankruptcy, the company was acquired out of administration by the private equity firm Golden Gate Capital for approximately $286 million.
The potential third bankruptcy filing underscores the ongoing challenges facing traditional brick-and-mortar retail, even for iconic and historically significant brands like Eddie Bauer. The move highlights a strategic shift towards preserving manufacturing and digital sales channels while potentially exiting the physical storefront model across North America.
