Eddie Bauer, the outdoor-clothing chain that sold goose-down coats to Mount Everest mountaineers and college students alike, filed for Chapter 11 bankruptcy protection on Wednesday afternoon, and said it planned to sell itself for $202 million to CCMP Capital, a private equity firm.
The company filed for Chapter 11 protection in Delaware, and 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.
Eddie Bauer is pursuing a sale to CCMP through what is known as a 363 sale process in bankruptcy court. A judge would need to approve the sale, and other potential bidders could emerge. CCMP, as a so-called stalking horse bidder, is entitled to a $5 million breakup fee if it loses during the court-supervised auction process.
The company, which had some 371 stores in North America, was struggling to repay its debt after the sudden shutdown in consumer spending torpedoed its sales. The falloff in sales came as the chain was trying to pull off a multi-year turnaround that included cost cuts, as well as changes to its management team and its merchandise.
“Eddie Bauer is a good company with a great brand and a bad balance sheet,” Neil Fiske, Eddie Bauer’s chief executive, said in a 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. We expect this process to be completed very quickly, protecting our employees and critical vendor partners every step of the way.................