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Eddie Bauer Stefan Kaluzny

February 26, 2012

Bellevue-based  retailer  Eddie Bauer  said Tuesday it has completed its previously announced sale to San Francisco private-equity firm Golden Gate  Capital, enabling it to emerge from bankruptcy protection as a new, privately  held company.

Golden Gate won a bankruptcy-court auction last month  with a $286 million cash bid for Eddie Bauer. As part of its purchase, it agreed  to operate at least 300 of Eddie Bauer’s 370 North American stores and keep most  of its employees, including management.

Tuesday, Golden Gate indicated its support for a  two-year-old effort, begun by Chief Executive Officer Neil Fiske, to return  Eddie Bauer to its active-outdoor roots.

“We are very pleased to acquire the Eddie Bauer  operations and to partner with the existing management team in continuing to restore and rebuild this  iconic brand,” Golden Gate managing director Stefan Kaluzny said in a  statement.

Fiske said the company is talking with its landlords  about new lease terms for all of its stores, as well as its Bellevue  headquarters.

Store closures will largely depend “on what landlords  are willing to do with us” over the next 90 to 120 days, Fiske said.

Eddie Bauer moved its headquarters two years ago from  Redmond to downtown Bellevue, where it has a 15-year lease for 220,000 square  feet at Lincoln Square.

“We’re committed to staying in the Seattle area, and we  like Bellevue,” Fiske said. “Hopefully, we stay right where we are.”

Fiske said he also hopes to avoid additional layoffs.  The company eliminated about 70 jobs at its headquarters early this year under a  plan to cut up to $15 million from its operating cost structure, following cuts  of as much as $50 million last year. It now employs about 420 full-time workers  at its headquarters.

“We’ve done a lot of the restructuring,” he said. “Now,  the focus is on how we strengthen and build the organization while still keeping  it lean.”

Since 2003, Golden Gate has bought 20 retailers and  consumer-products companies, including women’s clothiers Express and J.Jill. All  told, its apparel companies have annual sales of $4  billion and 1,250 stores covering nearly 10 million square feet, Golden Gate  said.

Founded in 1920 in Seattle, Eddie Bauer filed for  Chapter 11 bankruptcy-court protection in June, citing a crushing debt burden,  the current recession, and the lingering effects of a shift in focus from its  outdoor heritage in the 1990s and early-2000s under then-owner Spiegel. In 2005,  two years after catalog retailer Spiegel filed for bankruptcy, Eddie Bauer  became a stand-alone, publicly traded company.

Its sale to Golden Gate allows it to emerge from  bankruptcy with “a much stronger balance sheet, little or no long-term debt and  a substantially lower cost structure,” the retailer said in a statement.

“We’re one of few retailers that’s gone into bankruptcy  in the past two or three years and come out,” Fiske said. “And we’ve come out in  record time 47 days is almost unheard of.

“Clearly, we still have challenges, but we’re in a much  stronger position,” he said. “And people are excited about what the future  holds.”



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