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Originally published June 10, 2009 at 12:00 AM | Page modified June 10, 2009 at 11:50 AM

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Bankruptcy in store for Eddie Bauer?

Eddie Bauer Holdings may seek bankruptcy protection as soon as this week, according to five people with knowledge of the discussions. The speculation halved the...

Bloomberg News

Eddie Bauer Holdings may seek bankruptcy protection as soon as this week, according to five people with knowledge of the discussions.

The speculation halved the Bellevue company's stock price, which fell 24 cents to close at 24 cents Tuesday.

Hilco Consumer Capital has expressed interest in bidding on the outdoor-clothing chain's assets, said the people, who declined to be identified because the talks aren't public.

CCMP Capital Advisors, a private equity firm based in New York, may also make an offer for the retailer, which is being advised by Peter J. Solomon Co., the people said.

Eddie Bauer, which opened its first sporting-goods store in Seattle in 1920, had annual losses the past three years. It operates about 370 stores in the U.S. and Canada.

No final decision has been made about a bankruptcy filing, the people said. The Wall Street Journal, citing sources familiar with the situation, said a sale of unspecified assets is being explored as another option.

Eddie Bauer had $187.9 million in long-term borrowings and $2.62 million in cash in the quarter ended April 4, according to a company filing. The company reported a loss of $44.5 million in the first quarter on sales of about $180 million.

Gordon Brothers Group has also held talks with Eddie Bauer, people familiar with the matter said in May.

In the past year, Hilco Consumer Capital, which is based in Toronto, and Boston's Gordon Brothers have purchased defunct retailers such as Sharper Image and Linens 'n Things.

Sarah Redgrave, a spokeswoman for Eddie Bauer, declined to comment, citing company policy. Representatives of Hilco, CCMP and Peter J. Solomon also wouldn't comment.

Eddie Bauer emerged as an independent company in 2005, two years after parent Spiegel filed for bankruptcy protection. General Mills owned the company from 1971 until 1988.

Shareholders rejected efforts to sell in 2007, killing a planned $285 million deal with two buyout firms.

Copyright © 2009 The Seattle Times Company

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