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The operator of roughly 180 Eddie Bauer stores across the US and Canada has filed for Chapter 11 bankruptcy protection, blaming declining sales and a litany of other industry headwinds.
The bankruptcy filing marks the third time in a little over two decades for the storied-but-now-tired brand that began as a Seattle fishing shop, later outfitted the first American to climb Mount Everest and made thousands of newfangled down jackets and sleeping bags for the military during World War I.
Eddie Bauer LLC said Monday it had entered into a restructuring pact with its secured lenders as it made the filing in the US Bankruptcy Court for the District of New Jersey.
Most Eddie Bauer retail and outlet stores in the US and Canada will remain open as the company winds down certain locations. It noted that it will conduct a court-supervised sales process, and if a sale can’t be executed, it will begin a wind-down of its US and Canadian operations.
“This is not an easy decision,” said Marc Rosen, CEO of Catalyst Brands, which maintains the license to operate Eddie Bauer stores in the US and Canada. “However, this restructuring is the best way to optimize value for the retail company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow.”
Eddie Bauer’s stores outside of the US and Canada are operated by other licensees, are not included in the Chapter 11 filings, and will stay open, according to the release.
Authentic Brands Group continues to own the intellectual property associated with the Eddie Bauer brand and may license the brand to other operators, the company said. The operations of other brands in the Catalyst Brands portfolio are not affected by this filing and will continue in the normal course, according to the company.
Eddie Bauer’s e-commerce and wholesale operations will also not be impacted by the wind down, as they are operated by a company called Outdoor 5, LLC. That was a transition it made in January and became effective Feb. 2.
Eddie Bauer joins a growing list of US retailers this year that are closing stores, as companies reorganize under bankruptcy protection or pare down their operations to focus on the most profitable businesses.
The parent company of Saks Fifth Avenue said last month that it was seeking bankruptcy protection, buffeted by rising competition and the massive debt it took on to buy its rival in the luxury sector, Neiman Marcus, just over a year ago. A few days later, the parent company said it was closing most of its Saks Off 5th stores.
Amazon said earlier this month that it was closing almost all of its Amazon Go and Amazon Fresh locations within days as it narrows its focus on food delivery and its grocery chain, Whole Foods Market.
Eddie Bauer’s namesake founder — an avid outdoorsman — started the company in Seattle in 1920 as Bauer’s Sports Shop, according to the brand’s website. In 1945, after making more than 50,000 jackets for the military, it launched a mail-order catalog.
“Bauer’s Sports Shop was not just a place where people purchased clothing and gear, it was a community hub where folks gathered to share their wisdom, learn, and talk about their experiences in the outdoors,” the website says.
The company created an American goose-down insulated jacket, known as the “Skyliner,” in 1936, and it became the company’s first patented jacket. It also outfitted the first American to climb Mount Everest — James W. Whittaker — with an Eddie Bauer parka in 1963.
After Bauer retired in 1968 and sold the business to his partner, the outdoor brand shifted more toward casual apparel and was bought by General Mills Inc. in 1971 and then by Spiegel Inc. in 1988. After Spiegel filed for bankruptcy in 2003 and most of its assets were sold, the remainder of the company was reorganized in 2005 as Eddie Bauer Holdings Inc.
In June 2009, Eddie Bauer filed bankruptcy and was acquired by Golden State Capital, the following month. In 2021, it was acquired by Authentic Brands and SPARC Group LLC.
A year ago, Catalyst was formed by the merger of SPARC and JCPenney, which Simon Property Group and fellow mall landlord Brookfield bought out of bankruptcy.
Rosen noted that even prior to the inception of Catalyst Brands last year, Eddie Bauer was in a “challenged situation.”
“Over the past year, these challenges have been exacerbated by various headwinds, including increased costs of doing business due to inflation, ongoing tariff uncertainty, and other factors,” he said.
He noted that while Catalyst’s leadership was able to make improvements in product development and marketing, those changes could not be implemented fast enough to fully address the problems created over several years.
Eddie Bauer had nearly 600 stores at its peak in 2001, according to CoStar Group Inc., a commercial real estate data firm.
In a note published earlier this month, Neil Saunders, managing director of GlobalData Retail, wrote that while the Eddie Bauer name is “well known”, the brand hasn’t kept pace with rivals like Swedish outdoor brand Fjallraven and Canadian label Arc’teryx. He also cited issues with quality deteriorating, which, for an outdoor brand measured by the performance of its products, is very problematic.
“And for many younger shoppers, the brand is seen as somewhat old-fashioned and a bit irrelevant, ” he noted.
