Eddie Bauer to slash 76 jobs in Bellevue office
Making good on a promise to cut costs, troubled retailer Eddie Bauer told 76 employees at its Bellevue headquarters Wednesday that their...
Seattle Times business reporter
Making good on a promise to cut costs, troubled retailer Eddie Bauer told 76 employees at its Bellevue headquarters Wednesday that their jobs will be eliminated as part of a 16 percent cut in the corporate work force.
All told, the company is cutting 123 jobs, including 32 in the Chicago area and 15 in Columbus, Ohio, leaving a 624-person corporate staff.
Wall Street seemed to approve, sending shares up 8 cents, or 1.4 percent, in after-hours trading to $6.01. Shares were down earlier in the day before the layoff announcement.
"Our costs are too high," Chief Executive Neil Fiske said Wednesday in an interview. "Our overhead costs run about 41 percent of revenue, and if you look at competitors ... theirs run in the mid-30s."
Fiske said employees will receive undisclosed severance packages, as well as help finding other jobs.
The retailer told analysts and investors last fall and again this month that it would slash up to $30 million in operating costs.
Eddie Bauer reported a loss of $16.4 million for the three months that ended Sept. 29, narrower than the $197.6 million loss it posted a year earlier.
Revenues totaled $210.9, down from $211.3 million during the same three months in 2006.
"In a soft consumer environment, they'd better do something to maintain cost control," said Bret Jordan, vice president of Delta Partners, a Boston hedge fund that owned Eddie Bauer shares until last year. "Retail in general is hard right now, and it's particularly hard if you're trying to fix it."
Fiske, previously CEO of Limited Brands' Bath & Body Works unit, took over at Eddie Bauer in June, replacing Fabian Mansson, a former H&M executive who tried to attract a younger demographic by injecting more fashion into its clothing.
Mansson gave up the top post at Eddie Bauer after investors rejected a $285 million buyout offer by two private equity firms in February.
Its current share price values the company at $182 million.
Under Fiske, the company has tried to reassert its authority in the outerwear category and sharpened its focus on its core customers, who range in age from 30 to 54.
Fiske said Eddie Bauer's staff "reorganization" is complete, but management will continue to "look at every element of the cost structure and attack it systematically."
"We believe our organization is leaner and more focused, and now we're going to see how fast we can move this brand forward," he said.
Also Wednesday, Eddie Bauer announced two new management hires: Tony Krohn, previously with North Face, will be divisional vice president of research, design and development for outwear, activewear and gear; Joe Moji becomes divisional vice president of financial planning and analysis.
Krohn received 6,375 stock options, exercisable at $5.64 a share, plus 5,643 stock awards that vest after four years. Moji received the same number of stock options and 2,125 stock awards.
Amy Martinez: 206-464-2923 or firstname.lastname@example.org
Copyright © 2008 The Seattle Times Company
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