Eddie Bauers Bowing Out

The financially ailing Spiegel Group (Downers Grove, Ill.) plans to close 45 Eddie Bauer stores, and will continue closing under-performing stores as it evaluates lease renewals. The catalog retailer disclosed those plans while reporting a 19 percent decline in fourth-quarter earnings.

The Bauer chain, which has struggled against months of declining sales at stores open at least a year, sells outdoor-oriented apparel and home furnishings through catalogs and more than 560 stores.

Spiegel Group ceo Martin Zaepfel said although the ongoing economic downturn has hampered sales, “weaknesses in our merchandise offer and marketing programs also contributed to the lackluster sales performance, particularly in our Eddie Bauer division.” The company had planned for Bauer's revamped product offering to deliver improved sales during the quarter, but “customer acceptance was obviously lower than expected,” Zaepfel said.

Spiegel Group also plans to sell its long-troubled credit card business, and disclosed that it was not in compliance with certain 2001 loan covenants due to its dismal results for the year. It said it is currently working closely with its bank and its majority shareholder, Germany's Otto family, to restructure its credit facilities. Its goal is to have new financing agreements in place by mid-April.