106-year-old pioneer outdoor brand files for bankruptcy citing industry challenges

Eddie Bauer, the outdoor apparel and gear retailer operating approximately 180 stores across the U.S. and Canada, has filed for Chapter 11 bankruptcy protection, citing declining sales and a host of other industry challenges.

This marks the third time in just over two decades that the once-storied brand, which began as a Seattle fishing shop and famously outfitted the first American to climb Mount Everest, has sought insolvency proceedings.

The company, Eddie Bauer LLC, announced on Monday that it had entered into a restructuring agreement with its secured lenders as it submitted its filing to the US Bankruptcy Court for the District of New Jersey.

While most Eddie Bauer retail and outlet stores in the US and Canada are expected to remain open for now, the company will initiate a court-supervised sales process. Should a buyer not be found, the operations in these regions will be wound down.

Marc Rosen, CEO of Catalyst Brands, which holds the licence to operate Eddie Bauer stores in the US and Canada, acknowledged the gravity of the decision. "This is not an easy decision," he stated. "However, this restructuring is the best way to optimise value for the retail company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow."

Crucially, Eddie Bauer’s stores outside of the US and Canada, which are managed by other licensees, are not included in the Chapter 11 filings and will continue to operate as normal. Similarly, Authentic Brands Group retains ownership of the intellectual property associated with the Eddie Bauer brand and may license it to other operators. The operations of other brands within the Catalyst Brands portfolio are also unaffected, as are Eddie Bauer’s e-commerce and wholesale divisions, which have been run by Outdoor 5, LLC since February.

Eddie Bauer’s latest financial woes place it among a growing number of US retailers closing stores or reorganising under bankruptcy protection this year. High-profile examples include the parent company of Saks Fifth Avenue, which sought bankruptcy protection last month amid rising competition and significant debt, and Amazon, which recently announced the closure of most of its Amazon Go and Amazon Fresh locations to refocus on food delivery and its Whole Foods Market grocery chain.

The brand’s rich history dates back to 1920 when its namesake founder, an avid outdoorsman, established Bauer’s Sports Shop in Seattle. The company is credited with creating the American goose-down insulated jacket, the "Skyliner," in 1936, its first patented jacket. It also supplied James W. Whittaker with an Eddie Bauer parka for his historic ascent of Mount Everest in 1963, and, according to the filing, made thousands of newfangled down jackets and sleeping bags for the military during World War I.

After Bauer’s retirement in 1968 and the sale of the business, the brand shifted towards casual apparel, undergoing several ownership changes, including acquisitions by General Mills Inc. in 1971 and Spiegel Inc. in 1988. Following Spiegel’s bankruptcy in 2003, Eddie Bauer was reorganised in 2005. It filed for bankruptcy again in June 2009, subsequently acquired by Golden State Capital, and then by Authentic Brands and SPARC Group LLC in 2021. Catalyst Brands was formed a year ago through the merger of SPARC and JCPenney.

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Marc Rosen noted that Eddie Bauer was already in a "challenged situation" prior to Catalyst Brands' inception. He explained that "Over the past year, these challenges have been exacerbated by various headwinds, including increased costs of doing business due to inflation, ongoing tariff uncertainty, and other factors." Despite leadership efforts to improve product development and marketing, these changes could not be implemented quickly enough to counteract years of accumulated problems.

At its peak in 2001, Eddie Bauer boasted nearly 600 stores. However, Neil Saunders, managing director of GlobalData Retail, observed that while the brand name remains "well known," it has failed to keep pace with modern rivals such as Fjallraven and Arc'teryx. He also highlighted concerns over deteriorating product quality, a critical issue for an outdoor brand, and suggested that for many younger consumers, Eddie Bauer is perceived as "somewhat old-fashioned and a bit irrelevant."