Eddie Bauer's new owner plans to keep most stores, staff

San Francisco private-equity firm Golden Gate Capital won a bankruptcy court auction for Eddie Bauer's assets and plans to keep most of its stores and employees, the retailer said today.

Golden Gate's all-cash bid of $286 million will be presented to the court for approval on Wednesday, and is expected to close in early August.

Stockholders in Eddie Bauer are not expected to get anything when the proceeds of the auction are distributed, the company said.

"I think everyone on the creditors' side is happy," said David Pollack, a Philadelphia bankruptcy attorney whose clients hold leases on about 100 Eddie Bauer stores. "There's going to be money to pay a lot of things. They're going to keep open most stores, and employees of about 300 stores are going to continue to have jobs."

As part of its purchase agreement, Golden Gate will keep at least 300 of Eddie Bauer's 370 stores in the United States and Canada.

Golden Gate last month bought women's clothier J.Jill from Massachusetts-based Talbots for $75 million. It paired with Sun Capital Partners in 2007 on a $285 million offer for Eddie Bauer that was ultimately rejected by shareholders.

Eddie Bauer filed for Chapter 11 bankruptcy protection last month in Delaware, blaming a crushing debt burden it was forced to take on after emerging from the Spiegel bankruptcy in 2005, as well as the current recession.

Eddie Bauer announced at the time 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 would have to buy the clothing chain if no other bidders topped its offer.

CCMP bid as high as $285 million during the auction, which began Thursday and ended shortly after 2 a.m. in New York.

Among the other bidders were North Carolina apparel company VF, which wanted Eddie Bauer's trade name and Web site, and Boston-based liquidator Gordon Brothers Group, which wanted the company's inventory to sell off.

New York-based Iconix Brands was another bidder that wanted to operate Eddie Bauer as a going concern.

An Iconix spokeswoman told Bloomberg News this morning it is pursuing its legal options after losing the auction. Iconix owns and licenses such brands as Danskin, London Fog and Rocawear.

Eddie Bauer employs about 8,600 people, including several hundred at its downtown Bellevue headquarters. It had $476.1 million in assets and $426.7 million in debt at the time of its bankruptcy filing.

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