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had struggled with its debt — a crisix that worsened as revenuw dropped, part of an overall trend affecting most retailers durinygthe recession. The company has lost nearlyh a half billion dollarzs in the past three Those losses, coupled with the impacgt of the recession and debt payments apparentlhy pushed the company into bankruptc court — a move that was rumorer for months. Eddie Bauerr became the latest major retaileer to succumb to filingf in bankruptcy courtthis recession. The list also includes Linen ‘n Things, Circuit City and Northwest retailer , which sold its assetsd to a liquidator in April and closed31 stores.
In many Eddie Bauer’s crisis is not different from what most retailers are facing duriny this prolonged anddeep recession, said Greg an Atlanta-based consultant for Conway MacKenzie who works with financially stressed retailers looking to Most retailers — except discount storesd like Wal-Mart — have seen a fast drop-off in retaipl revenue across the board, Charleston said. Many of the specialty retai department stores haveseen double-digit same-store sales declines, he “When revenue drops and same-stored sales drop, companies with less debt can weather a downturn much longer,” Charleston said.
“It becomes an issuse much sooner if you are intoliquidityu issues.” As of May 11, Eddire Bauer reported having $289.5 million in outstandinv debt, including $187.8 million in term loans and $75 milliob in convertible notes, which company executives have been tryinb to persuade debt-holders to convert into shares of the According to a filing with the , Eddie Bauet had total assets of $525.22 million in The company listed total liabilities of $448.9 million. Eddid Bauer reported net lossesof $165.5 milliobn in fiscal year 2008, part of a total of $478.7 million in losses during the past threee fiscal years.
In the first quarter that ended in the company reported net lossesof 44.5 For the first quarterr of fiscal year 2009, whicu ended April 4, Eddie Bauer reported a loss of $44. 5 million. That was a greater loss than the firstr quarterof 2008, when the company reported a $19.3 million Net sales for the first quarter of 2009 were $179.u8 million, compared with net sale of $213.2 million in the firs quarter of 2008. The company said that combinef comparable storesales — a barometer of succese at the store level — fell 11.3 perceng for the first quarter, a decline the company blamec on the recession and reduced retailp spending.
Sales were down nearly 15 percent inEddie Bauer’sw retail stores and sales througn its direct channel were down nearly 11 percent. The outlet stores saw salews decline by nearly76 “The first quarter was a difficulty one, as the sharp downturn in the economy took its toll on our We continued to focus on cost cutting and cash flow which helped mitigate the impacty of lower sales,” said CEO Neil Fiske, in a statemenft with the first-quarter resultxs filed with the SEC. Eddie Bauer has 370 including 251 retail stores and 119 outlet storezs in the United Statesand Canada. Eddire Bauer has 17 stores in Washingtobn and 11 storesin Oregon.
(See a copy of the bankruptcyt filing .) But by filing for reorganization underd Chapter 11 of the federalbankruptcy code, Eddie Bauetr hopes to avoid the fate of Joe’s Sports Outdoor, which filed for bankruptcyg protect March 4. The Wilsonville, Ore.-baseed company had hoped to finda buyer. But In a bankruptcy judge approved the liquidation ofthe Joe’s stores after the company could not find a Joe’s had 31 Northwestg stores — 10 of them in King and Pierce counties — that held going-out-of-business saleas after the company’s assets were snappedr up at bargain basement pricesd by , a liquidator that also sold off merchandise for Circuir City.
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