Any chance that L.L. Bean would acquire Eddie Bauer evaporated March 5 when Bean president/CEO Chris McCormick informed employees of the decision in the company's internal weekly newsletter.
“The impetus was speculation in the local media, and he wanted to end speculation,” said Rich Donaldson, spokesperson at L.L. Bean, Freeport, ME. “It's been about a year since we first expressed interest. L.L. Bean notified the bankruptcy court of our interest in staying abreast of what was unfolding in the Spiegel bankruptcy proceedings. We consulted with about a dozen consultants as well as equity partners and bankers.
“Given the complexity of Spiegel's financial situation and the fact that there were issues with the quality of the assets, we decided that this is not the time to be considering an acquisition of this size or complexity.”
Eddie Bauer's bankrupt parent company Spiegel, Downers Grove, IL, has announced the locations of 29 Eddie Bauer stores it intends to close this year, including 16 that involve lease expirations.
“It was exploratory simply because it had yet to be determined what, if anything, will become available with respect to Eddie Bauer. Is it going to become available? Will it be sold in its entirety or will assets be sold individually?” he said. “We did have an interest initially in the individual assets — their customer file, primarily — and other elements such as [its] e-commerce business and possibly retail stores.”
Donaldson said that the “issue was if the file would've given us access to a new population of potential customers. The fact is, we probably have significant overlap.”
The stores, however, were at the bottom of Bean's list.
“The store format is just not right for us,” he said. “They've got hundreds of stores, and that's not something we would be willing to take on. And they have a store format not compatible with what we've decided is our ideal format — the 30,000-square-foot realm, and their model is 5,000 square feet.”
When asked about Eddie Bauer's slumping sales, Donaldson said it was never L.L. Bean's intent to turn Eddie Bauer around, but rather to complement its brand.