The End of Eddie Bauer?

The buzz this week has been that Eddie Bauer Holdings is close to filing for bankruptcy if it can’t sell itself or restructure.

Liquidation firms have reportedly been sizing up the apparel cataloger/retailer for weeks, including Hilco Consumer Capital and Gordon Brothers—the firms that bought Sharper Image out of bankruptcy in May 2008.

Eddie Bauer, which recorded a net loss of $165.5 million for fiscal year 2008, said in March it has $193 million in outstanding debt, and that it was trying to amend the loan terms.

The Bellevue, WA-based company generated $971.3 million in sales for fiscal 2008, down from $989.4 million in 2007. Direct sales slipped 1.3%, from $277.9 million in 2007 to $274.2 million.

The merchant, which has tried to reinvent itself several times in the past decade, has recently been focusing on returning its rugged apparel roots. But given its debt load and the state of the general economy, it may have been too late for a turnaround.

Eddie Bauer has been an independent company in 2005; former parent Spiegel had filed for bankruptcy protection in 2003. (Before Spiegel, Eddie Bauer had been owned by General Mills, from 1971 to 1988.)

Golden Gate Capital and Sun Capital in November 2006 agreed to buy Eddie Bauer for $614 million. But Eddie Bauer shareholders in March 2007 voted against the proposed sale because the price — $9.25 per share — was too low. That’s about $9 more than its share price today.