Eddie Bauer's latest bump in the road

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The deal is off. Eddie Bauer Holdings Inc. said last week that an insufficient number of stockholders voted in favor of approving the company's proposed sale to Eddie B Holding Corp. at a special meeting of stockholders held on Feb. 8.

As a result, Eddie Bauer will continue to operate as a standalone publicly traded entity and its board of directors will evaluate appropriate next steps for the company.

In November, Eddie B Holding Corp.,which is owned by Sun Capital Partners Inc. and Golden Gate Capital, agreed to acquire Eddie Bauer Holdings, Redmond, WA,  for $9.25 per share in cash, or about $614 million. Eddie Bauer's board of directors approved the deal. The merchant had only recently become an independent for the first time in 35 years after emerging from Spiegel Inc.'s Chapter 11 reorganization in June 2005.

"Eddie Bauer has probably withstood more problems, redirections, re-strategies, re-managements and rearrangements than any other direct marketing company, but it remains a quality property," said Don Libey, president of consultancy Libey Inc., Des Moines, IA, at the time of the announcement of the Sun Capital/Golden Gate acquisition.

Golden Gate and Sun Capital's retail expertise was expected to provide some needed direction to Eddie Bauer.

In January, the company reported that for the fiscal year ended Dec. 30, net merchandise sales declined 4.5 percent totaling $957 million. Comparable stores sales for fiscal 2006 decline 2 percent and sales from the company's direct channel decreased by 4.4 percent.

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