Outdoor financials: VF 'party of interest' in Eddie Bauer bidding, plus Wolverine and Kellwood

VF is now a "party of interest" in the auction for Eddie Bauer's assets, asking the U.S. Bankruptcy Court in Delaware to send it all notices in the case, Kellwood may be forced to file for bankruptcy protection after missing a $140 million bond payment, and Wolverine's Q2 profit dropped 53 percent.
Author:
Publish date:

VF 'party of interest' in Eddie Bauer bidding

As it navigates the bankruptcy channels, Eddie Bauer (Pink Sheets: EBHIQ) may have a potential suitor. According to court documents, VF Corp. (NYSE: VFC), parent of The North Face, JanSport and Eagle Creek, is now a "party of interest" in the auction for the retailer's assets, asking the U.S. Bankruptcy Court in Delaware to send it all notices in the case.

Others that have also requested all notices in the case include creditors such as suppliers, lenders and landlords, and investment firms such as Monarch Alternative Capital LP. Sources say Iconix Brand Group (Nasdaq: ICON) and Golden Gate Capital, a private equity group, might also bid on the company.

Eddie Bauer filed for Chapter 11 protection last month. At the time, it said it would seek court approval to sell its assets to private equity firm CCMP Capital for $202 million.

CCMP is the "stalking horse" bidder for the bankruptcy auction. A stalking horse submits a starting bid to set a floor under other possible offers in exchange for certain protections that often include break-up fees.

Despite VF's interest, it does not necessarily mean the company plans to bid. Experts say a company may want to be kept apprised of an auction, especially if the bankrupt company owes money, or has the potential to be snatched up by a rival.

But VF has been on an acquisition streak in past years, and company executives say they have been eyeing potential targets as the weak economy provided buying opportunities. VF will have $600 million in cash and $1.3 billion in accessed funds by the end of the year.

Eddie Bauer's auction is scheduled for July 16.



Wolverine's Q2 profit drops 53 percent


Second-quarter profit for Wolverine World Wide, parent of Merrell and Chaco and licensee of Patagonia Footwear, plunged 53 percent on restructuring charges, but boosted its full-year adjusted earnings forecast.

For the quarter ended June 20, Wolverine earned $7.9 million, or $0.16 per share, compared with $16.8 million, or $0.33 per share, in the same period a year earlier. Excluding $0.11 per share in restructuring and other charges, profit was $0.27 per share in the latest quarter.

Sales fell 8 percent to $246.4 million from $267.4 million. The company said it was a result of the stronger dollar and challenging trading conditions in several markets.

Adjusting for the negative impact of changes in foreign exchange rates due to a stronger U.S. dollar, revenue declined only 3.1 percent in the quarter.

"During the quarter, we achieved a double-digit increase in our Merrell business in the U.S. and got off to a strong start with the Chaco brand. Company revenue was above our internal plan for the quarter, which helped contribute to solid earnings results," said Blake Krueger, Wolverine's CEO and president, in a statement.

As part of its restructuring, Wolverine announced in January that it would cut 450 jobs -- about 10 percent of its staff -- in a move to save $17 million to $19 million annually. The restructuring actions were expected to cost $31 million to $36 million before taxes to implement, with the charges recorded throughout 2009.

Looking forward, the company lifted its full-year adjusted earnings outlook. Excluding restructuring and other costs of $33 million to $36 million, the company now expects 2009 profit of $1.55 to $1.73 per share. Its prior forecast was for earnings of $1.50 to $1.70 per share. It also anticipates revenue in a range of $1.07 billion to $1.12 billion.

Kellwood may be forced to file bankruptcy after failed agreement with bondholders according to WSJ

A July 11 news story by the Wall Street Journal (click here to read) reported that St. Louis based Kellwood, which employs approximately 2,000 people and is the parent company of Kelty, Sierra Designs, Slumberjack, Royal Robbins, Ultimate Directions, Wenger, etc., may be forced into bankruptcy reorganization because of defaulting on a $140 million bond that expired July 15. The company has been unable to refinance the bond in part because of poor sales of approximately $800 million (a fraction of its reported sales of $2 billion in 2006) against $500 million in debt.

--Compiled by Wendy Geister & Michael Hodgson

For more information about any public company on this page or its financial reports, as well as to view stock prices updated every 15 minutes, visit the SNEWS® Stock Market Updates. Click on: www.snewsnet.com/cgi-bin/snews/stock_report.html.

Related