The financial terms of the deal were not disclosed.
Pending certain standard closing conditions such as U.S. and Canada antitrust filings and approvals, the deal is expected to be finalized on June 1.
The deal to purchase Eddie Bauer from the PSEB Group, an operating group owned by Golden Gate Capital, was revealed Friday. ABG will own Eddie Bauer’s intellectual property while the brand’s core operating business will become a part of the SPARC portfolio, which includes Brooks Brothers, Aéropostale, Forever 21, Lucky Brand and Nautica. Collectively, those labels generate $8.6 billion in sales.
With more than 1,000 employees and estimated annual sales of $500 million, Eddie Bauer competes with such other brands as REI, L.L. Bean and Lands’ End, as well as outdoor labels ranging from Patagonia to The North Face.
ABG’s holdings span the entertainment, media, fashion, active, beauty, home and hospitality sectors and it has had a busy 15 months, acquiring Barneys New York and Brooks Brothers and also linking with SPARC to become involved in J.C. Penney Co. Inc.
But by bringing Eddie Bauer on board, ABG will be forging into new territory. The vertical Eddie Bauer company is a heritage brand in the outdoor industry. Dating back more than a century, Eddie Bauer is credited with having developed the first quilted down jacket via a 1940 patent. The company’s namesake founder, a Pacific Northwest sportsman, started the brand in 1920 by selling tennis wear in Seattle. PSEB first linked up with Eddie Bauer in 2009.
Once the deal is finalized, Eddie Bauer will be part of SPARC although its headquarters will remain in Seattle under its current leadership of president Damien Huang. In partnership with SPARC, the Eddie Bauer team will manage the brand’s sourcing, product design, development, wholesale, planning, allocation and e-commerce. They will also oversee the company’s 300 stores, most of which are in the U.S. and Canada.
Asked about layoffs and any planned closings of Eddie Bauer facilities. An ABG spokeswoman said Friday, “We do not have information about facilities or staffing yet.”
In revealing the acquisition Friday, ABG described Eddie Bauer’s e-commerce business as “robust” and highlighted that online sales drove nearly 50 percent of its annual retail sales last year.
While many areas of the fashion industry have buckled during the coronavirus crisis, the outdoor category is not one of them. Established brands like L.L. Bean have reported robust sales for everything from kayaks and hiking shoes to weather-tested performance apparel. Many adrenaline- or just sunshine-seeking consumers headed to some of the 423 national parks in the U.S. for safe, socially distanced activities.
The global outdoor apparel market is expected to increase to $3.9 billion by 2023, and is projecting a compound annual growth rate of 5 percent during that forecast period.
ABG’s founder, chairman and chief executive officer Jamie Salter said in a statement: “The global outdoor market opportunity has grown exponentially over the last year and we are ready to hit the ground running and guide this brand into new frontiers in partnership with SPARC, [president] Damien [Huang] and the rest of the Eddie Bauer team.”
Eddie Bauer has changed hands through the years after its founder sold it in 1968. General Mills and Spiegel owned it at different points in time. Under the Spiegel Inc. umbrella, the company filed for Chapter 11 bankruptcy in Delaware in 2009 and was later purchased by Golden Gate Capital. The Eddie Bauer name has been used to license a range of products including furniture, bicycles and Ford Motor Co.’s Bronco, Explorer and other SUVs.
With Eddie Bauer, ABG plans to follow the playbook it has established for its other brands, with immediate plans to expand it internationally, particularly Latin America, Europe and the Asia Pacific, as well as into other categories that suit the outdoor lifestyle. There are already “near-term” launches planned for parts of China and Korea that are meant to drive initial growth.
There are also plans to amp up marketing and brand development for Eddie Bauer in order to attract younger consumers, while maintaining its loyal ones. ABG and SPARC aim to do that with enhanced content, building its online following and launching collaborations inspired by the brand’s DNA.