The Latest from Spiegel: Downsizing Bauer, Reintroducing Credit Cards Apr 28, 2003 12:00 PM
, Paul Miller
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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.
