Eddie Bauer Bankruptcy

The long time outdoor clothing store Eddie Bauer is filing for chapter 11 bankruptcy.

Eddie Bauer Holdings Inc., which began as a Seattle fishing shop, later outfitted the first American to climb Mt. Everest and made thousands of newfangled down jackets and sleeping bags for the military during World War II filed for chapter 11 this Wednesday.

The company has said it will try to keep the majority of its 371 stores open and honor its gift cards and hold onto most employees.

It reported a loss for the first quarter of $44.5 million as sales fell 16 percent to $179.8 million.

It had $476.1 million in assets and $426.7 million in debt at the time of the filing Wednesday with the U.S. Bankruptcy Court of the District of Delaware.

Since becoming CEO in 2007, Neil Fiske tried to turn the company around, cutting jobs and lowering expenses. But the company continued to falter as the economy soured.

"Now you have too many stores chasing shoppers who are more cash- and credit-constrained than any time post-World War II," said retail consultant Burt Flickinger III, managing director of Strategic Resource Group.

"Eddie Bauer is a good company with a great brand and a bad balance sheet," CEO Fiske said in the statement. "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."

Eddie Bauer said it has a commitment from its existing lenders for so called debtor-in-possession financing of $90 million.

Eddie Bauer is in the same circle as Circuit City, Linens 'N Things, Mervyns and other retail chains that have filed for bankruptcy court protection as consumer spending fell amid the recession.