NEW YORK — The bankrupt Spiegel Group plans to close 60 underperforming Eddie Bauer stores, though many more are expected to be on the chopping block.
Spiegel said Monday the store closings are an integral part of the reorganization process, and that it would be exploring additional retail sites for possible closings. Currently, Eddie Bauer operates 529 stores. Spiegel previously said it would close 21 outlets.
On a much brighter note relevant to the restructuring, Spiegel said it chose Alliance Data Systems Corp. to establish the catalog operator’s new private label credit card program. The program, which still requires Manhattan bankruptcy court approval, would include Spiegel’s three merchant operations: Eddie Bauer, Spiegel Catalog and Newport News.
As reported, Spiegel’s previous private label credit card operation was shuttered when First Consumers National Bank, the direct marketer’s wholly-owned subsidiary, entered into a voluntary liquidation due to failure to meet financial covenants.
"Outsourcing to a third party is a good sign," that someone has confidence in Spiegel’s business, said Mary Ann Domuracki, managing director of the Financo Restructuring Group.
Regarding the stores, Domuracki observed, "Eddie Bauer has extraordinary locations, many in ‘A’ malls. The problems have been in the merchandising. It just hasn’t been hitting. So the company has been operating these expensive stores that were not particularly productive, and some are very big locations with Eddie Bauer home stores right next to the Eddie Bauer apparel stores."
Domuracki said about 30 store leases were coming up for renewal and landlords in certain cases had decided not to renew them.
"Years ago, Eddie Bauer was opening stores with 3,000 square feet, but recently, it was not uncommon to see 12,000 to 14,000-square-foot stores on two levels and with their merchandising issues, sales productivity dropped dramatically," said Steve Greenberg, president of The Greenberg Group real estate advisers to retailers.
There has been speculation that Spiegel may decide to sell off Eddie Bauer, but on Monday, sources indicated that the Spiegel restructuring team has yet to make an official decision on asset sales, though it has been weighing interest. Pruning Eddie Bauer’s store count would help sell it, since the price would be lower and the chain would be streamlined with only productive stores remaining. With Spiegel operating under Chapter 11 bankruptcy court protection since March, it can take advantage of the process to reject unwanted leases without severe penalty."The first 60 stores — that’s an easy group to shed. It doesn’t mean there won’t be another 60 or 100 or 200 to come," said one source. "The 60 stores being closed will have very little affect on operating Eddie Bauer as a stand-alone."
The stores slated to close will remain open for business for at least a few months. First, the store-closing plan must be approved by the bankruptcy court, and then there will be liquidation sales where units remain open until they run out of goods, or get depleted enough to warrant closure. A motion for permission on the store closing plan was expected to be filed Monday.
Bill Kosturos, interim chief executive officer and chief restructuring officer of The Spiegel Group, said in a statement, "The decision to close stores is never easy, yet we are confident that this move will result in a healthier, more productive store base for Eddie Bauer as we eliminate the least productive stores and concentrate our efforts on boosting store productivity."
Fabian Mansson, president and chief executive officer of Eddie Bauer stated, "We are taking tough, but necessary steps to position Eddie Bauer for future success." Mansson has been trying to beef up the quality of the merchandise so that it better reflects Eddie Bauer’s heritage of innovative, outdoor-inspired products.
Eddie Bauer operates 382 apparel stores, 45 home stores and 102 outlets. The stores targeted for closure include 51 apparel and eight home stores and one outlet, all in the U.S. Some stores operate in Canada. Previously, the company said it would close 21 outlets.
Stronger apparel chains such as American Eagle, Abercrombie & Fitch, Victoria’s Secret, Pac Sun, Express and Chico’s, will be vying for the sites — and there are some choice locations slated to close. Among the best locations are a home store and an apparel store, both on Post Street in San Francisco, as well as apparel stores in South Coast Plaza in Costa Mesa, Calif., Georgetown in Washington, the Ala Moana mall in Hawaii, the Mall at Short Hills in New Jersey and the Desert Passage at the Aladdin hotel in Las Vegas.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)