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Abercrombie Closes Ruehl; Eddie Bauer Files for Bankruptcy

Two retailers made big announcements today. Abercrombie & Fitch Co. has decided to shutter the Ruehl chain. That will result in 29 store closures.

Meanwhile, Eddie Bauer filed for bankruptcy. The company will be sold to private-equity firm CCMP Capital Advisors LLC for $202 million.

CCMP said it plans to keep a majority of the retailer's employees and operate a majority of its stores. It said it would support the company's efforts to continue to pay suppliers and honor gift cards while it operates under bankruptcy court protection.

The clothing retailer posted a net loss of $44.5 million for its most recent quarter and has $187.9 million in long-term debt. The company had been negotiating with holders of $75 million of its senior notes to convert that debt to equity. Shares have tumbled in recent weeks following rumors of a potential bankruptcy.

"Eddie Bauer is a good company with a great brand and a bad balance sheet. This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction," said Neil Fiske, Chief Executive Officer of Eddie Bauer. He blamed "a crushing debt burden" and the effects of the recession for the bankruptcy filing.

Bankruptcies and Liquidations:

Potential Bankruptcies & Liquidation Impact: 1,526 confirmed closures out of about 3,319 stores

Announced Closings

Total Closings: up to 1,544 U.S. stores

Potential Impact of All Announcements to Date: 3,070 closures out of up to 4,863 potentially affected U.S. stores

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