NEW YORK — As part of its restructuring, Spiegel Inc. inked an agreement Monday to sell Spiegel Catalog to Pangea Holdings Ltd. for $31 million plus liabilities.
Pangea Holdings is the firm that’s buying the bankrupt retailer’s Newport News business for $25 million, a deal that is expected to close next week, the company said.
Spiegel’s management said the bankruptcy court is expected to approve bidding on the catalogue business, and that a hearing is scheduled for June 15. An auction will be held, “if necessary.”
Bill Kosturos, interim chief executive officer and chief restructuring officer of Spiegel Group, said in a statement that the agreement with Pangea “is an important step” as the company continues “to make progress toward developing a plan of reorganization, while focusing on maximizing the value of the estate for our creditors.”
Geralynn Madonna, president and ceo of Spiegel Catalog, said in a statement that she was pleased with the deal. She thanked employees for their work in repositioning the brand.
“In January of this year, we introduced a redesigned Spiegel Catalog — providing today’s busy woman the ultimate ‘idea resource’ and a one-stop shopping destination,” Madonna said. “We will work diligently during the sale process to execute a smooth transition and fulfill the needs of our customers.”
Two weeks ago, Spiegel said in its quarterly report that it narrowed its loss in the first quarter to $100.5 million, or 76 cents a share, from $114.2 million, or 87 cents, in the year-ago quarter. Sales fell 25.9 percent to $264.4 million from $356.7 million.
The firm said retail sales at Eddie Bauer fell 21 percent, which was due to the closure of 100 Bauer stores. Same-store sales declined 2.3 percent.
Management said the comparable-store sales were dragged down by a poor performance in its home goods and men’s wear business. But the company quickly added that results were partially offset by demand for its women’s apparel mix.
— Arthur Zaczkiewicz