By  on June 11, 2009

Liquidation and restructuring experts are expecting a bankruptcy filing by Eddie Bauer Holdings Inc., but the retailer is still in talks to either sell itself or restructure its balance sheet, sources said Wednesday.

A spokeswoman for Bauer, based in Bellevue, Wash., declined comment.

Liquidators have been eyeing Bauer’s stores for the last several weeks, and have said the situation was not good. The retailer operated 251 full-price units and 119 outlets as of April 4, the end of the first quarter.

One credit analyst said that, if the outdoor activewear and outerwear chain does file for bankruptcy, there was a good chance it might liquidate. He suggested that a private equity firm might be willing to buy the brand’s trademarks and license them.

Bauer officials in past conference calls said they have had ongoing negotiations with the retailer’s convertible note holders, discussions aimed at restructuring the firm’s balance sheet. Sources close to the company said those conversations, as well as negotiations with other parties over the possible sale of the company, are ongoing. These sources emphasized that no decision has been made on any option that may be available to the chain.

The loss for the first quarter ended April 4 widened to $44.5 million from a $19.3 million loss in the year-ago period. Sales fell 15.7 percent to $179.8 million from $213.2 million. Same-store sales were down 11.3 percent.

Bauer became an independent firm in 2005 as part of the reorganization of Spiegel Inc., its parent that filed for Chapter 11 bankruptcy court protection in 2003.

Bauer established its first store in downtown Seattle in 1920, called Eddie Bauer’s Sport Shop. The business was sold to General Mills in 1971, and then sold to Spiegel in 1988.

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