Financial analysts speculated that when the Spiegel Group filed for Chapter 11 bankruptcy, it would sell off its profitable Eddie Bauer division for much-needed cash. Now Portland, Maine-based, competitor L.L. Bean has knocked on the bankruptcy court's door asking to be kept informed if Eddie Bauer's assets are put up for sale.
Rich Donaldson, an L.L. Bean spokesman, told SNEWS, "We have notified the bankruptcy trustee that should Eddie Bauer assets become available, we might have an interest in the acquisition of those assets. Which ones, whether it's the whole package or various components, we just don't know because we haven't gotten to that point yet. Most importantly, we are in the formative stages of this process, and it's quite unclear at this point in time as to what the ultimate disposition of Eddie Bauer will be -- that is, will it emerge from these proceedings intact under current or new ownerships or might it be sold off in parts?
"So there are a lot of what-ifs in this particular scenario. But having said all that, we have entered into this with a strong curiosity about the fit of any Eddie Bauer assets as they relate to L.L. Bean's growth strategies. We're not entering into this with any preconceived notions about the ultimate outcome, but we're very open to the possibilities as they present themselves," Donaldson added.
In other news, the Spiegel Group plans to layoff 635 jobs as part of its reorganization plan, 180 of which are in the Eddie Bauer division. Effective May 9, Spiegel said it will eliminate 90 employees in its corporate information services unit, and another 90 in its Chicago area headquarters and data center.
SNEWS View: Valued at $1.5 billion last year, Eddie Bauer could help L.L. Bean's bottom line immensely as it has been stuck at the $1.1 billion sales mark for some time now. L.L. Bean is a multi-channel business that's been forthcoming with the fact that it wants to grow top-line sales by leveraging various channels of its business. So, with that in mind, it could fit various Eddie Bauer assets into its retail store, mail-order catalog and web strategies. Having Eddie Bauer in its corner would also give L.L. Bean a competitive edge against its other major rival, Lands' End, which was bought by Sears last year and is now featured in those stores. Eddie Bauer has more than 500 stores, while L.L. Bean has four flagships and 15 outlets. A buy would roughly double its sales volume and make it a major retail store player.