Golden Gate Capital acquired Eddie Bauer in 2009 out of bankruptcy for $286 million in cash. The private equity firm is atypical in that it has no specific time frame in mind prior to any attempt to monetize an investment. It was also partnering with Jos. A. Bank in its initial bid for Men’s Wearhouse, providing $250 million in equity capital. Men’s Wearhouse rebuffed Jos. A. Bank’s offer and has now begun an unsolicited takeover bid for Jos. A. Bank that’s set to expire on March 28.
Gilbert Harrison of Financo Inc., Jos. A. Bank’s financial adviser, and executives at Golden Gate declined comment about the talks with Eddie Bauer, as did Michael R. Egeck, chief executive officer of Bauer.
Market intelligence early Wednesday had Jos. A. Bank and Eddie Bauer still in discussions, but one source said price might be a stumbling block. It was unclear by week’s end how much further those talks had progressed.
Stifel analyst Richard Jaffe, who covers Men’s Wearhouse, said an acquisition of Eddie Bauer “would significantly diminish the appeal of [Jos. A. Bank] as an acquisition by Men’s Wearhouse, which is probably an objective, whether it is authentic interest or merely a ploy.”
Mark Montagna, an analyst at Avondale Partners, who covers Jos. A. Bank, said, “Eddie Bauer would be a bad fit. People under the age of 40 have minimal awareness of the brand. If Eddie Bauer is such a desirable acquisition, at this point [Golden Gate] would already have [done] an initial public offering [for the brand].”
According to Montagna, Men’s Wearhouse is still the best option for Jos. A. Bank, although given the animosity that has developed between the two companies, “it’s a wonder how a merger would ever work. Would the two teams be able to work together?”
Montagna did note that there’s pressure ahead in terms of growth for Jos. A. Bank. “The retailer only has room for another 130 full-line stores in the U.S. and 57 more factory doors. There’s not a lot of domestic store growth ahead of them,” he said.
Egeck, who has a strong reputation in the active outdoor space having had stints at VF Corp.’s North American Outdoor business and The North Face, provided metrics on what seemed to be still early stages of a turnaround at the specialty chain. Having joined Eddie Bauer in June 2012, the ceo is nearly two years into his five-year plan.
“We’ve had 16 industry awards in the last 18 months [and] the outdoor industry is recognizing the innovation level in our product.…We’ve seen some nice traction that has accelerated toward the end of the year. We had comparable-store sales just under 5 percent during holiday, a 15 percent comps increase in December, and we ended the year with positive comps that were up 1 percent for the entire year,” he said.
Egeck said Eddie Bauer’s main competitors are The North Face, Columbia Sportswear, Timberland, REI, Patagonia and L.L. Bean.
Annual volume is $1.3 billion in worldwide sales, including licensed businesses, with the U.S. market at $1.1 billion, Egeck said. Bauer’s e-commerce operation is about one-third of its total business. The company has an active customer file “in excess of four million” names and sends out 66 million catalogues a year, totaling 5.9 billion pages, according to Egeck. There are 380 stores globally, with 324 in the U.S. and Canada. It opened five stores last year.
Gary H. Schoenfeld, president and ceo of Pacific Sunwear of California Inc., is a friend of Egeck’s and a Bauer customer. “I’m a longtime customer of Bauer who didn’t shop there for quite awhile, until just recently. They’ve enhanced the technical products and [are] going back to what Bauer stands for as a legitimate and leading outdoor brand,” he said.
Even presuming a deal for Bauer gets done, there’s a chance it could get undone. That’s because Eminence Capital, which has stakes in both Jos. A. Bank and Men’s Wearhouse and is pushing for Jos. A. Bank to negotiate with Men’s Wearhouse, filed a complaint in a Delaware Chancery Court last month seeking to block Jos. A. Bank, via preliminary and permanent injunctions, from making any acquisition. Earlier this week, it amended its complaint naming Bauer as the target of the blocking transaction and noting that Men’s Wearhouse continues to pursue a deal for Jos. A. Bank.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast