Eddie Bauer files for bankruptcy protection, equity firm enters bid
After weeks of rumors to the effect, it's official: Eddie Bauer has voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware, as well as the Ontario Superior Court of Justice in Canada.
It added that CCMP Capital, a global private equity firm, has bid on its assets for $202 million in cash. Other buyers may also make bids while the company is under court protection.
Eddie Bauer said it has $476.1 million in assets and $426.7 million in debt in its filing with the bankruptcy court.
Neil Fiske, president and CEO of Eddie Bauer, said in a statement that the bankruptcy filing will reduce the "crushing" debt load placed on the company from the Spiegel reorganization in 2005.
"This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction. We expect this process to be completed very quickly, protecting our employees and critical vendor partners every step of the way," he said.
He noted that the launch of the new First Ascent expedition-grade outerwear and gear will continue.
The company has secured a commitment from its existing revolving credit lenders, Bank of America, GE Capital and CIT Group/Business Credit for Debtor-in-Possession financing of $100 million based on final court order, which it said it believes will provide ample liquidity to meet its ongoing obligations during the sale process.
The company plans to conduct business as usual, and its 371 stores, catalog operations and online sites are open.
Founded in 1920, Eddie Bauer was originally known for its mountaineering and expedition gear. Then, in 1988, Spiegel bought the company and transformed it into a retailer focusing on women's casual clothes. In 2003, Spiegel filed for bankruptcy protection, and two years later Eddie Bauer was spun off.
Amer Sports forewarns on Q2 profit, appoints new executive board
Amer Sports, parent of Salomon and Arc'Teryx, said its full-year outlook is "clouded by the uncertainty in consumer demand in general." It noted that profitability in 2009 is affected by the challenging market conditions, particularly in the United States and for the fitness segment.
Pre-orders in winter sports equipment for the next season are at last year's level, reflecting market share gains in the European market.
Unless market conditions start to improve materially during the rest of the year, Amer Sports estimates that its operating profit for the full-year 2009 will be below last year's level. In February, the company had anticipated results would improve on better cost efficiency in the winter sports equipment business.
The company will report second-quarter earnings on Aug. 6.
In other news, Amer Sports has reorganized its management model by creating one group-wide Amer Sports management team.
Members of the new executive board are: Roger Talermo, president and CEO; Pekka Paalanne, executive vice president and CFO; Thomas Ehrnrooth, senior vice president - sales and channel management; Vincent Wauters, senior vice president - supply chain and information technology; Terhi Heikkinen, senior vice president - human resources; Chris Considine, president of ball sports; Paul Byrne, president of fitness; Juha Pinomaa, president of sports instruments; Michael Schineis, president of winter sports equipment; Jean-Marc Pambet, president of apparel and footwear; and Bernard Millaud, president of cycling.
Newly appointed to the executive board are Pambet, Millaud and Heikkinen. Amer Sports said due to the change, its executive team has been dissolved.
--Compiled by Wendy Geister
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