Eddie Bauer LLC, the retail operator for about 180 Eddie Bauer stores across the United States and Canada, announced Monday, Feb. 9, that it filed for Chapter 11 bankruptcy protection.
Here’s what Illinois shoppers should know.
Why did Eddie Bauer store operator file for bankruptcy protection?
The retail operator cited declining sales, supply chain challenges and other issues for its financial problems.
Will Eddie Bauer stores close?
Eddie Bauer LLC, a division of Catalyst Brands, said its retail locations would continue to serve customers as it conducts a court-supervised sale process, according to a press release. But if a buyer cannot be found, then it will be forced to close its U.S. and Canadian locations.
“This is not an easy decision,” Marc Rosen, CEO of Catalyst Brands, said. “However, this restructuring is the best way to optimize value for the retail company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow.”
What about online store?
Eddie Bauer LLC’s Chapter 11 bankruptcy is not expected to impact the brand’s manufacturing, wholesale, or e-commerce operations, nor would it impact retail operations outside of the U.S. and Canada.
The brand and its IP worldwide are owned by Authentic Brands Group, a global brand development and licensing platform, which also has Reebok, Nautica, Brooks Brothers and Dockers in its portfolio.
Authentic, on Jan. 3, announced it was expanding its partnership “with longtime Eddie Bauer licensee Outdoor 5, LLC (Oved) to assume responsibility of the brand’s e-commerce and wholesale operations, as well as design and product development in the United States and Canada.”
“The strategic focus on digital growth builds on Eddie Bauer’s strong online footprint and its community of explorers, who come together across its platforms to share and seek new adventures,” the company said in a news release.
Are Eddie Bauer locations in Illinois closing?
There are currently eight Eddie Bauer stores in Illinois. The company has not announced any closures as of Feb. 10.
What is Chapter 11 bankruptcy?
Chapter 11 bankruptcy is “frequently referred to as a ‘reorganization’ bankruptcy,” according to the United States Courts.
“Usually, the debtor remains ‘in possession,’ has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money,” the Courts say. “A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements.”
CONTRIBUTING: Marina Johnson, Louisville Courier Journal
This article originally appeared on Journal Star: Eddie Bauer store operator files for bankruptcy. Will Illinois shops close?
Reporting by Hannah Hudnall, Fernando Cervantes Jr. and Saman Shafiq, Peoria Journal Star / Journal Star
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