The Latest from Spiegel: Downsizing Bauer, Reintroducing Credit Cards

Less than two weeks after announcing that it would close 21 Spiegel and Newport News outlet and clearance stores, The Spiegel Group on April 28 announced plans to also close 60 underperforming Eddie Bauer stores in 25 states plus Washington. Roughly 900 jobs will be lost.

Like the Spiegel and Newport News outlet closings, the Eddie Bauer store closings are subject to bankruptcy court approval. Downers Grove, IL-based Spiegel Group has been operating under chapter 11 bankruptcy protection since mid-March. Spiegel expects to continue to evaluate the financial performance of Eddie Bauer stores and make decisions going forward regarding the possibility of additional store closures. Eddie Bauer currently operates 529 stores in the U.S. and Canada.

If approved by the court, store-closing sales will begin in late May, says Spiegel spokesperson Debbie Koopman, winding down two to three months later. “At that time,” she says, “if there’s opportunity for us to match any store associate with an opening in another store, we’ll do that if the skill set matches.”

Spiegel is also awaiting from bankruptcy court to offer a new private-label credit card for its three brands. The cataloger/retailer on April 28 agreed to establish the credit-card program with transaction, marketing, and credit-services provider Alliance Data Systems Corp.

The credit-card program will have no relation to Spiegel’s existing or prior programs, and there would be no transfer of existing receivables. Under terms of the agreement, Alliance Data would apply credit standards and underwriting policies for the new program that are consistent with Alliance Data’s other retail-client credit-card programs.

After failing to sell its First Consumers National Bank (FCNB) credit-card division, Downers Grove, IL-based Spiegel in March stopped accepting charges on FCNB-issued cards and announced plans to liquidate the bank. Not part of the Chapter 11 filing, FCNB is being liquidated under the terms of a preexisting consent order entered into with the Office of the Comptroller of the Currency in May 2002.

In addition, Spiegel is seeking court approval to extend the time allowed to reject executory contracts. These include contracts such as store lease operations, Koopman says, under which the company has obligations to perform.

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