The retail operator of outdoor clothing brand Eddie Bauer could close approximately 180 stores across North America as the company reportedly prepares for a Chapter 11 filing.
Sources say the entity operating Eddie Bauer’s stores in the US and Canada is preparing a Chapter 11 bankruptcy filing. The entity licenses the rights to operate Eddie Bauer stores in the two markets and is owned by Catalyst Brands.
The bankruptcy protection process would only affect Eddie Bauer’s brick-and-mortar operations in the US and Canada. It would not impact the brand’s manufacturing, wholesale or e-commerce operations, nor would it impact retail operations outside of the two countries.
Authentic Brands Group owns the intellectual property of Eddie Bauer worldwide. There are approximately 200 Eddie Bauer stores globally, about 180 of which are located in the US and Canada.
Catalyst Brands was formed last year by merging JCPenney with Sparc Group, a joint venture involving Authentic Brands Group, Simon Property Group, Brookfield Corp, and Shein. The entity manages a portfolio of brands, including Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, Nautica, and JCPenney’s private labels.
Last month, Authentic Brands entered into an agreement to transfer Eddie Bauer’s e-commerce and wholesale businesses to licensing platform Outdoor 5. The transition was complete as of February 2.
Eddie Bauer founded his namesake brand in Seattle in 1920. The business underwent several changes of ownership and filed for bankruptcy twice before it was acquired by Golden Gate Capital in 2009. Authentic Brands and Simon Property, via their JV Sparc Group, bought the brand in 2021.
At the time Catalyst was formed, Ken Ohashi, CEO of Brooks Brothers, also assumed the CEO position at Eddie Bauer.
‘Old-fashioned and irrelevant’
According to GlobalData MD Neil Saunders, Eddie Bauer has not kept pace with rivals despite being a well-known brand.
“From a consumer perspective, it is nowhere near as exciting as some of the fast-growing players like Fjallraven and Arc’teryx. And for many younger shoppers, the brand is seen as somewhat old-fashioned and a bit irrelevant,” Saunders said.
“There are also issues with quality deteriorating, which, for an outdoor brand measured by the performance of its products, is very problematic. Again, other brands like Arc’teryx stress the technical aspects of their products and push this heavily in customer communications.”
These missteps have depleted sales and impacted the profitability of stores, the analyst said. He added that while newer stores look good, many of the older ones lack sufficient emphasis on factors such as education and storytelling.
The softness facing the overall market for outdoor products also amplifies the problems, he continued.
“All in all, Eddie Bauer needed very careful brand management to survive in this environment, but this has been somewhat lacking and has undone the economics of the business,” he said.
