Longtime outdoor apparel brand Eddie Bauer is facing bankruptcy again.
The company, which runs around 180 stores in the United States and Canada, filed for Chapter 11 bankruptcy protection over declining sales and industry challenges. It marks the third time in a little more than 20 years that Eddie Bauer has filed for bankruptcy.
Eddie Bauer LLC confirmed on Monday a restructuring agreement with secured lenders and the U.S. Bankruptcy Court filing in New Jersey. Catalyst Brands, which has a license for running Eddie Bauer stores, released a statement.
Most stores will remain open in the United States and Canada, while Eddie Bauer will have a court-supervised sales process, which could allow the business to operate with new ownership. Eddie Bauer will wind down its stores if a buyer isn’t found.
It only affects the U.S. and Canada stores, as stores outside of both countries will stay open because those stores are under a different license. Eddie Bauer’s e-commerce, manufacturing, and wholesale will also continue unaffected by the bankruptcy since those entities are run by Outdoor 5, LLC. Authentic Brands Group, which has intellectual property associated with Eddie Bauer, is also unaffected by the bankruptcy.
Store closures and bankruptcies have been a growing trend in U.S. retail. Saks Fifth Avenue, a parent company of Eddie Bauer, filed for bankruptcy in January. The company announced the closure of most Saks Off 5th stores.
Rosen noted Eddie Bauer faced difficulty before Catalyst Brands formed via the merger of JCPenney and SPARC. Legacy retail brands such as Eddie Bauer have been mired in the changes of consumer tastes, inflation, and market competition.
“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,” Rosen said.