Eddie Bauer Sold to Holding Company
Sun Capital Partners Inc. and Golden Gate Capital, two private equity firms working together under the name Eddie B Holding Corp., have purchased catalog retailer Eddie Bauer for $9.25 per share. The total transaction value was around $614 million, and includes $328 million in debt. The sale is expected to close in first-quarter 2007.
The Board of Directors of Eddie Bauer has unanimously approved the agreement and has recommended that Eddie Bauer’s stockholders vote to approve it.
Once the transaction is completed, Eddie Bauer will be added to Sun Capital and Golden Gate’s portfolio of companies and brands. Sun Capital runs Mervyn’s; Shopko Stores; Lillian Vernon; Marsh Supermarkets; Anchor Blue Retail Group; Dim Branded Apparel; and Most. Golden Gate Capital runs Catalog Holdings, a subsidiary that operates the Spiegel; Newport News; Appleseed’s; Norm Thompson; Drapers and Damons; Venus; and Haband brands.
Separately, Eddie Bauer reported third-quarter revenue of $211.3 million, down from $217.3 million in third-quarter 2005, and net loss of $197.6 million, compared with a loss of only $9.7 million a year ago.
Much of the company’s current loss stems from $117.6 million in intangible asset impairment charges. At $89.3 million, the company’s selling, general and administrative expenses were in line with last year’s figure of $89.2 million, while its cost of sales was $138.5 million, just slightly above last year’s $138.3 million.
Additionally, the company incurred costs relating to a customer rewards program it launched during third-quarter 2006.
