Although Spiegel has no specific timetable, the bankrupt holding company appears to be closing in on accepting a bid for its last remaining division, apparel cataloger/retailer Eddie Bauer. The company has received bids in bankruptcy court from several private investment firms, including Apollo Management, Bain Capital, Credit Suisse First Boston’s private equity arm, and Kohlberg Kravis Roberts & Co.
The next step is to evaluate the bids and determine if one is worthy of becoming the “stalking horse” bid in a bankruptcy court auction. At that time, other higher bids could still be accepted.
“We’ve reached no conclusion yet,” says Spiegel chief financial officer Jim Brewster. “It could mean we move toward a sale or decide the values of the bids aren’t what we want.”
Brewster downplayed a Reuters report on Aug. 18 that said Spiegel would await Redmond, WA-based Bauer’s fall sales results before considering the recent offers. Those offers, the report said, were submitted after Spiegel reported an 11% decrease in Bauer’s comparable-store sales for June and “hovered around $700 million-$800 million.” According to Reuters, Spiegel was hoping to receive at least $1 billion for Bauer.
“We’re in just the normal process of seeking market interest, getting some feedback from the market, and determining what our next steps are,” Brewster says, noting that the June sales decline is nothing new, since the company’s comp-store sales have continuously fallen in recent months. “Our men’s business hasn’t performed well,” he adds. “And that’s one part of our business we’re still in the process of fixing.”
Whether or not Downers Grove, IL-based Spiegel is waiting for Bauer’s fall sales to turn upward and drive up bids, Brewster says there have been some positive developments with Bauer. The company has reported better earnings numbers since filing for Chapter 11 in March 2003, mostly due to store closings, layoffs, and improvements in the company’s warehouse systems, call centers, and store distribution process.