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Eddie Bauer Redux

Eddie Bauer has returned to its roots as it continues to plow ahead with its turnaround strategy. The specialty retailer has refocused on its casual sportswear and accessories that embrace the great outdoors. So far, it appears to be working.

The problem for the chain with 394 stores, analysts say, was that it had branched out too far beyond its core product lines of outdoor apparel and accessories. “I get much more positive feedback about Eddie Bauer today than I did two years ago or a year ago,” says Britt Beemer, chairman and founder of America's Research Group Inc., based in Charleston, S.C.

Net income during the fourth quarter rose to $63.2 million compared with a loss of $12.8 million in the same quarter of 2005. It emerged from bankruptcy in 2005.

Last month, Eddie Bauer announced it had completed a $275 million secured-term loan that provides the retailer with increased flexibility while lowering interest expenses.

“Completing this refinancing was an important step in positioning the company to move forward with its turnaround strategy,” said interim Chairman Howard Gross, in a statement.

To maintain its momentum, Beemer says, it must keep its focus on outfitting customers with the outdoorsy look and products they expect from Eddie Bauer, which can be a tricky task. “They may have done nothing wrong except thought fashion was going one way and it went another.”

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