Eddie Bauer files for bankruptcy

NEW YORK – Struggling retailer Eddie Bauer Holdings Inc., which began as a Seattle fishing shop, later outfitted the first American to climb Mt. Everest and made thousands of newfangled down jackets and sleeping bags for the military during World War II, filed for Chapter 11 bankruptcy protection Wednesday.

Still known for outdoorsy clothing but serving a distinctly more domestic clientele of students and other mall patrons, the company said Wednesday that a bidder has agreed to keep the majority of its 371 stores open and honor its gift cards and hold onto most employees.

The company said CCMP Capital Advisors LLC has bid $202 million in cash for its assets.

Other buyers may also make bids while the company is under court protection.

Bankruptcy rumors had been swirling as Bellevue, Wash.-based Eddie Bauer struggled with slumping sales amid the recession. It reported a loss for the first quarter of $44.5 million as sales fell 16 percent to $179.8 million.

It had $476.1 million in assets and $426.7 million in debt at the time of the filing Wednesday with the U.S. Bankruptcy Court of the District of Delaware.

Since becoming CEO in 2007, Neil Fiske tried to turn the company around, cutting jobs and lowering expenses. But the company continued to falter as the economy soured.

“Now you have too many stores chasing shoppers who are more cash- and credit-constrained than any time post-World War II,” said retail consultant Burt Flickinger III, managing director of Strategic Resource Group.

Eddie Bauer said in a statement that CCMP has agreed to operate the company as a going concern with little or no long-term debt.

“Eddie Bauer is a good company with a great brand and a bad balance sheet,” CEO Fiske said in the statement.

“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.”

CCMP specializes in buyouts and growth equity investments.