Eddie Bauer bidders include liquidator, apparel maker

A well-known liquidator in Boston and a North Carolina apparel maker are among a half-dozen or so companies interested in taking over Bellevue-based Eddie Bauer.

The struggling outdoor-clothing chain is set to auction itself off today as part of its ongoing bankruptcy proceedings, and it reportedly has drawn interest from companies whose plans run the gamut from keeping Eddie Bauer stores open to closing them down and selling online.

"I expect to see lively bidding," said David Pollack, a Philadelphia bankruptcy attorney who represents shopping centers where Eddie Bauer has stores.

"You don't see a lot of this in a recession. But when you have a good name with good real estate, and parties that think they can turn things around, it's not surprising," Pollack said.

Eddie Bauer filed for bankruptcy protection last month and announced that New York private-equity investor CCMP Capital made an initial cash offer of $202 million for its assets in a so-called stalking-horse bid, meaning CCMP must buy the company if no other bidders top its offer.

"You're probably going to see a bid that is better in many respects than the $202 million" by CCMP, said Brian Huben, a Los Angeles bankruptcy attorney who represents shopping centers where Eddie Bauer has stores, including Macerich-owned Redmond Town Center.

The auction begins midmorning in New York and is likely to go all day, possibly longer. A successful bidder will then be picked, and a judge overseeing the proceedings will make a final decision Wednesday.

"There obviously are people who see value in the business," CCMP managing director Jonathan Lynch said of Eddie Bauer. "If people think they can buy something at a good price in a difficult economy, it becomes attractive to them. And I think that's what we're seeing."

CCMP, whose other retail investments include Cabela's, Guitar Center, 1-800-flowers.com and Quiznos, said it would continue to operate at least 250 of Eddie Bauer's 370 North American stores and keep its management team.

Huben noted that a "going-concern" bidder such as CCMP could get preference over a liquidator because it promises less disruption to employees and landlords.

"If it's a close call, it's possible that the creditors' committee and debtor will say, 'although in dollars, the going-concern bid is less, it has a higher benefit because jobs will be preserved and stores will continue to operate and serve their communities,' " Huben said.

Eddie Bauer had $476.1 million in assets and $426.7 million in debt when it sought Chapter 11 protection from its creditors last month in Delaware. Founded in 1920, the company lost money in each of the past three years. It employs 7,700 people in the United States, including several hundred at its Bellevue headquarters, plus 933 in Canada.

Among those interested in Eddie Bauer are New York-based Iconix, which owns and licenses such brands as Danskin, London Fog and Rocawear, as well as Golden Gate Capital, which paid Talbots $75 million last month for women's clothier J.Jill.

It would not be the first time that Golden Gate has tried for Eddie Bauer: The San Francisco private-equity firm paired with Sun Capital Partners in 2007 on a $285 million offer that was ultimately rejected by shareholders.

Also, Eddie Bauer has drawn a joint bid from Toronto-based private-equity firm Hilco Consumer Capital and Boston-based liquidator Gordon Brothers Group. Hilco and Gordon teamed up to buy Sharper Image, Bombay Co. and Linens-n-Things in the past two years, selling off their inventory and closing down stores.

New York-based Monarch Alternative Capital and Anchorage Advisors, two of Eddie Bauer's largest creditors, reportedly are interested in turning Eddie Bauer into an Internet-only business.

The interest from Iconix, Golden Gate, Hilco and Gordon Brothers was reported by Bloomberg News. The New York Post reported Monarch's and Anchorage's involvement.

The companies declined to comment or could not be reached for comment. People involved in the process confirmed those reports but spoke on the condition that their names not be used because the discussions were not yet public.

Women's Wear Daily reported large apparel company VF is another bidder. Some observers speculate that it might be interested in converting Eddie Bauer to a Web-based business. VF notified the bankruptcy court Monday that it's a "party in interest" and wants to be informed of any developments in the proceedings.

VF, of Greensboro, N.C., owns more than two dozen brands, including North Face, Vans, Jansport and Lee. VF had $276.4 million in cash and equivalents at the end of March. Earlier in the month, it took full ownership of Mo Industries for $160.8 million, giving it the Splendid and Ella Moss clothing brands.

"We've considered acquisitions an important part of our growth strategy for years, and that hasn't changed," said Cindy Knoebel, vice president of financial and corporate communications at VF. She would not discuss VF's interest in Eddie Bauer. "It has to be the right brand at the right price."

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com