NEW YORK — Bankrupt Spiegel Inc. is quietly shopping its Eddie Bauer retail chain.
Financial sources have told WWD that Spiegel is gauging how much interest is out there — as well as how much a sale could garner — to help ease bankrupt Spiegel Inc.’s credit crunch. Sources familiar with the marketing of Bauer said that the catalog firm is hoping to get close to $200 million for the 535-unit chain, but will likely get far less.
"We don’t comment on rumors," a Spiegel spokeswoman said of the reports on Bauer, adding that Spiegel "is taking action to strengthen its financial position and operations to complete its restructuring and emerge from bankruptcy as soon as possible."
According to one investor, who decided to walk away from a potential purchase of the chain, the amount that Spiegel was seeking was "way too high" for the specialty retailer in its current format. The source didn’t rule out the possibility of another look at the chain, but only after a substantial number of stores were closed.
Several financial sources said that Spiegel might fetch $125 million to $150 million for Bauer if the specialty chain were downsized. However, at least 200-plus stores would need to be pared from the total store count, they said.
Pruning Eddie Bauer’s store count is now easier to do, since Spiegel is under Chapter 11 bankruptcy court protection and can take advantage of the process to reject unwanted leases.
Others added that Eddie Bauer could be a more attractive nameplate if certain merchandising changes were made, such as shuttering its home furnishings department, decreasing its sportswear offerings and focusing more on its original active-outdoor concept.
Spiegel filed for bankruptcy court protection last month in Manhattan. At the time, it was hoping to keep the Eddie Bauer division, which it acquired in 1988 from General Mills. As its most profitable operation, it is also the business most often cited for a possible sale.
Spiegel last month received bankruptcy court approval to use up to $150 million of its $400 million debtor-in-possession (DIP) package on an interim basis. A hearing originally scheduled for Wednesday for final approval of the balance of the financing facility has been adjourned until April 28.Given the current economic climate, a deal to sell Eddie Bauer is not likely to be concluded anytime soon.
Sources at investment banks and private equity firms have complained about the scarcity of attractive acquisition candidates. It is a problem for cash-rich companies trying to find places to invest their dollars.
A financial source in the credit markets observed: "Why would any firm — strategic or financial — invest in Eddie Bauer or any other retailer now? Until the war is resolved and the economy stabilizes, this is not the time to do a merger or acquisition."
That could be really bad news for Spiegel, which needs to stem the decline in sales to avoid a liquidation. Unfortunately, it is caught in a viselike grip because of its troubled and now comatose credit card operation.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye