Spiegel Reorganization Plan Gives Up Eddie Bauer

Share this content:
Spiegel Inc. filed a reorganization plan last week that, if approved, would hand over control of Eddie Bauer to its creditors. The plan was filed with U.S. Bankruptcy Court for the Southern District of New York.

With no assets left other than casual wear Eddie Bauer, it's hardly a surprise that the proposal calls for reorganizing the company around Eddie Bauer by establishing a new parent company, Eddie Bauer Holdings Inc. Eddie Bauer would remain headquartered in Redmond, WA.

"We have made significant progress throughout the restructuring process, reducing our cost structure and positioning Eddie Bauer to be a stronger competitor. As a result, the profitability of the Eddie Bauer business improved substantially in 2003 and 2004," president/CEO Fabian Mansson said in a statement.

As part of the plan, Eddie Bauer would focus solely on its core apparel and accessories business, which means 34 Eddie Bauer Home stores would close starting later this year.

The company expects a court hearing to be held March 29. Upon approval, Spiegel will solicit votes on the plan.

Key elements of the proposed reorganization include:

· Spiegel's general unsecured creditors, excluding Spiegel Holdings Inc. and its affiliates, will recover 90 percent of their allowed claims through a combination of cash and common stock.

· Spiegel will transfer its interest in Eddie Bauer Inc., Spiegel Acceptance Corp. and Financial Service Acceptance Corp. to Eddie Bauer Holdings Inc. Eddie Bauer Holdings would become the new parent company of the Eddie Bauer business. Eddie Bauer Holdings would operate as an independent business with a separate board of directors.

· Spiegel's creditors, with certain exclusions, initially will receive 100 percent of the equity in the emerging company.

According to a report in The Wall Street Journal, Spiegel's exit from insolvency became possible when controlling shareholder and German billionaire Michael Otto agreed to pay $104 million to release himself from all claims related to Spiegel's downfall.

Along with relinquishing ownership of Spiegel, Otto will forgo repayment of $160 million in loans to Spiegel from his holding company in the months before Spiegel's collapse.

Spiegel filed for bankruptcy in March 2003 with more than $1.7 billion in debts. The company's namesake catalog and its Newport News catalog businesses were sold last summer to Catalog Holdings Corp., New York.


Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above