WWD.com/beauty-industry-news/financial/spiegel-to-shut-21-stores-733704/
government-trade
government-trade

Spiegel to Shut 21 Stores

NEW YORK — Eddie Bauer’s 535 stores will be spared the saber in its parent company’s proposed first round of store cuts.<br><br>Bankrupt Spiegel Group plans to trim 21 stores to tighten its operations, but all of the planned closings...

NEW YORK — Eddie Bauer’s 535 stores will be spared the saber in its parent company’s proposed first round of store cuts.

This story first appeared in the April 21, 2003 issue of WWD.  Subscribe Today.

Bankrupt Spiegel Group plans to trim 21 stores to tighten its operations, but all of the planned closings will be of clearance units. Doors slated for closure include 12 outlet stores, four clearance stores and five Newport News outlet doors.

The stores will remain open pending the approval of bankruptcy court. Downers Grove, Ill.-based Spiegel filed for Chapter 11 protection in Manhattan last month, after difficulties in its credit card business helped bring financial pressure on the company to a boil.

Primarily, the doors were a means to liquidate overstock and end-of-season merchandise, noted the firm. Spiegel will continue moving inventory through other clearance channels including the Internet and catalogs.

The move, said the firm, would improve its inventory recovery rate and boost operating earnings by about $11 million annually. Should bankruptcy court approve the plan, the firm expects the closing process, which would be handled by an independent liquidator, to begin next month.

“The decision to close these stores, which do not meet our financial requirements going forward, is an integral part of the company’s reorganization effort,” said chief restructuring officer and interim chief executive Bill Kosturos. “While the business rationale supporting this action is compelling, we deeply regret the impact these store closings will have on our associates and our customers.”

As reported, Spiegel has been said to be quietly shopping its Eddie Bauer unit.

Financial sources said the firm is hoping to get close to $200 million for Bauer, but will likely get far less.