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Originally published August 4, 2009 at 10:33 AM | Page modified August 4, 2009 at 5:27 PM

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Eddie Bauer sale to Golden Gate completed

Eddie Bauer's new owner keeps management, active-outdoor strategy.

Seattle Times business reporter

Bellevue-based retailer Eddie Bauer said Tuesday it has completed its previously announced sale to San Francisco private-equity firm Golden Gate Capital, enabling it to emerge from bankruptcy protection as a new, privately held company.

Golden Gate won a bankruptcy-court auction last month with a $286 million cash bid for Eddie Bauer. As part of its purchase, it agreed to operate at least 300 of Eddie Bauer's 370 North American stores and keep most of its employees, including management.

Tuesday, Golden Gate indicated its support for a 2-year-old effort, begun by Chief Executive Officer Neil Fiske, to return Eddie Bauer to its active-outdoor roots.

"We are very pleased to acquire the Eddie Bauer operations and to partner with the existing management team in continuing to restore and rebuild this iconic brand," Golden Gate managing director Stefan Kaluzny said in a statement.

Fiske said the company is talking with its landlords about new lease terms for all of its stores, as well as its Bellevue headquarters.

Store closures will largely depend "on what landlords are willing to do with us" over the next 90 to 120 days, Fiske said.

Eddie Bauer moved its headquarters two years ago from Redmond to downtown Bellevue, where it has a 15-year lease for 220,000 square feet at Lincoln Square.

"We're committed to staying in the Seattle area, and we like Bellevue," Fiske said. "Hopefully, we stay right where we are."

Fiske said he also hopes to avoid additional layoffs. The company eliminated about 70 headquarter jobs early this year under a plan to cut up to $15 million from its operating cost structure, following cuts of as much as $50 million last year. It now employs about 420 full-time workers at its headquarters.

"We've done a lot of the restructuring," he said. "Now, the focus is on how we strengthen and build the organization while still keeping it lean."

Since 2003, Golden Gate has bought 20 retailers and consumer products companies, including women's clothiers Express and J.Jill. All told, its apparel companies have annual sales of $4 billion and 1,250 stores covering nearly 10 million square feet, Golden Gate said.

Founded in 1920 in Seattle, Eddie Bauer filed for Chapter 11 bankruptcy court protection in June, citing a crushing debt burden, the current recession, and the lingering effects of a shift in focus from its outdoor heritage in the 1990s and early 2000s under then-owner Spiegel. In 2005, two years after catalog retailer Spiegel filed for bankruptcy, Eddie Bauer became a stand-alone, publicly traded company.

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Its sale to Golden Gate allows it to emerge from bankruptcy with "a much stronger balance sheet, little or no long-term debt and a substantially lower cost structure," the retailer said in a statement.

"We're one of few retailers that's gone into bankruptcy in the past two or three years and come out," Fiske said. "And we've come out in record time — 47 days is almost unheard of.

"Clearly we still have challenges, but we're in a much stronger position," he said. "And people are excited about what the future holds."

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com

Copyright © 2009 The Seattle Times Company

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