Retail woes hit Eddie Bauer, Abercrombie
Eddie Bauer, the Washington-based outdoor-clothing chain, filed for Chapter 11 bankruptcy protection June 17 in Delaware. The retailer operates stores at the Simi Valley Town Center and the Camarillo Outlets in Ventura County.
Court filings show that Bank of America, General Electric and the CIT Group have agreed to provide up to $100 million in financing during the bankruptcy case.
The company, which has 371 stores in the United States and Canada, was struggling to repay its debt after the slowdown in consumer spending sank its sales. The falloff in sales came as the chain was trying to pull off a multi-year turnaround that included cost cuts and changes to its management team and its merchandise.
In a court filing, the company blamed debt to loans it took on when its onetime parent company, Spiegel, filed for bankruptcy in 2003. Eddie Bauer took on $300 million in debt, as well as Spiegel’s benefits and pension plans. The retailer said that about 50 percent of its earnings now go toward paying down that debt.
Meanwhile, Ohio-based Abercrombie & Fitch announced June 17 that it will close 29 of its Ruehl branded stores, including one at The Oaks shopping center in Thousand Oaks.
The company anticipates the closure will be complete by the end of the current fiscal year. Ruehl generated a pre-tax operating loss of approximately $58 million for the fiscal year ended January 31, 2009, including a non-cash impairment charge of approximately $22 million.