By  on April 24, 2006

NEW YORK — Eddie Bauer Holdings Inc. appears to be on a fast track to be sold.

The specialty retailer has hired Goldman Sachs as financial adviser to help it explore options for a sale. A spokeswoman for Eddie Bauer declined comment, as did a spokesman from Goldman Sachs. In January, WWD reported that several strategic and financial firms were looking to buy the retailer.

Late last week, financial sources close to companies said to be interested in bidding for Eddie Bauer said they expected offers for the retailer to be submitted before a May 1 refiling of the company's registration statement with the Securities and Exchange Commission. The potential bidders include strategic and private equity firms.

One banking source explained that a bid before the filing date would effectively "slow" the process of public trading of Eddie Bauer shares, and prevent new shareholders from having a say in the sale. The company's shares trade over the counter, and the registration filing would allow them to trade on the Nasdaq.

Another financial source familiar with the potential timing of a bid for Eddie Bauer said the current share price, which is in the $12 to $13 range, would be attractive to potential bidders. The stock was trading between $13 and $14 in January, and dropped to $10 earlier this month. The source noted that if shares of Eddie Bauer climb, the retailer "looks like a turnaround story." But the price per share a bidder would be required to pay would then be "too high," considering the company's underlying fundamentals, such as operating margins.

In January, WWD reported that VF Corp., Liz Claiborne, Kohlberg Kravis Roberts & Co. and Texas Pacific Group were interested in making a bid for Eddie Bauer. Of the four, VF was said to be "very interested." KKR has bid before for Eddie Bauer, but was rebuffed by former parent Spiegel's creditor constituency during the catalogue retailer's bankruptcy.

The Eddie Bauer spokeswoman said the company is finalizing the refiling of its Form 10 registration statement. The original filing of the Form 10-12G, which would allow shares of the company to trade on the Nasdaq once approved, was pulled in January. The corrected copy must be filed with the SEC by May 1. The spokeswoman said the SEC review takes 60 days.

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