Spiegel Inc. (Downers Grove, Ill.), the catalog retailer whose holdings also include Eddie Bauer, has been delisted by Nasdaq on Monday for failing to meet certain filing requirements — including not turning in its 2001 annual report.
A company spokesman said the trading halt will be temporary, but he could not provide any information on when or where the company's stock will begin trading again. Spiegel has not filed its 2001 annual report and first-quarter financial results with the Securities and Exchange Commission (SEC) due, in part, to a delay in renegotiating a lending agreement with its banks. The company said discussions with lenders have advanced, but again no details were provided.
Spiegel breached covenants on its $750 million line of credit earlier this year and at the time told investors it expected to have a new lending agreement in place by mid-April. While it failed that deadline, it did receive a $160 million loan from the Otto family of Germany, Spiegel's majority shareholder (and owner of Otto Versand, the world's largest mail order company).
Analysts have said that the Otto family has been the only lifeline keeping Spiegel out of bankruptcy. And some have also said that a Chapter 11 bankruptcy protection filing could be the best way for the company to get out of its current financial jam. It would allow Spiegel to restructure its balance sheet and shut down dozens of stores in its struggling Eddie Bauer chain. However, Crain's Chicago Business reports that Martin Zaepfel, Spiegel's president and CEO, has categorically dismissed the bankruptcy route.
Spiegel, which recorded sales of $2.7 billion in 2001, is clearly suffering from a challenging retail climate, as sales have sagged in recent months at its Eddie Bauer, Newport News and Spiegel Catalog units. Most of its sales come from its 560-plus-store Eddie Bauer unit, but sales are sagging there, as well.