Eddie Bauer LLC, the retail operator of approximately 175 Eddie Bauer stores in nearly every U.S. state and six Canadian provinces, filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey on February 9, 2026. The filing is the third chapter 11 in just over two decades for the 106-year-old outdoor apparel brand, following a 2003 case tied to parent company Spiegel Inc. and a 2009 filing that ended with a $286 million sale to Golden Gate Capital.
The 2026 case moved from a dual-track sale process into a wind-down. The debtors conducted store closing sales at all locations while pursuing a going-concern buyer for some or all of the retail operations, but no qualified buyer emerged for the remaining store platform. The filing came with unanimous support from the company's secured lenders, who hold approximately $1.74 billion in funded debt. Eddie Bauer's e-commerce and wholesale operations are not part of the bankruptcy — those rights were transferred to Outdoor 5, LLC, a longtime licensee of brand owner Authentic Brands Group, effective January 31, 2026 per the First Day Declaration. On February 23, 2026, the debtors filed a and on schedule under the RSA milestones. The court later confirmed the plan, and the debtors filed an effective-date notice on May 6, 2026, moving the cases into plan-administrator wind-down.
May 2026 Update: Plan Effective Date Starts the Wind-Down
Eddie Bauer's confirmed plan became effective in May 2026. The debtors filed a notice of effective date on May 6, 2026 after entry of the order confirming the third amended joint plan, and the case shifted from debtor-in-possession administration to a wind-down structure. On the effective date, the debtors became Wind-Down Debtors, a Plan Administrator assumed responsibility for remaining causes of action and distributions, and existing equity interests in SPARC EB Holdings LLC were canceled without recovery.
The effective date confirms the direction already signaled by the failed store sale process: the bankruptcy is now about liquidating remaining estate assets and distributing proceeds, while the Eddie Bauer brand continues outside the debtor store operator through Authentic Brands Group and Outdoor 5. The confirmed plan preserves claims and causes of action for the Plan Administrator, maintains D&O tail coverage for six years, and leaves Term Loan and Subordinated Loan claims with no recovery from the debtors while preserving claims against non-debtor parties.
Dual-Track Restructuring
RSA and lender support. The debtors executed a Restructuring Support Agreement with 100% of their ABL, Term Loan, and Subordinated Loan lenders, who collectively hold approximately $1.74 billion in senior secured funded debt. The First Day Declaration describes a dual-track framework: completion of one or more going-concern sale transactions free and clear of liens, and an orderly wind-down of all brick-and-mortar operations not sold. The RSA contemplated plan confirmation within 70 days of the petition date and required filing a chapter 11 plan within 14 days. The debtors met the plan-filing milestone on February 23, 2026.
Cash collateral. The debtors sought authority to use cash collateral of the prepetition secured parties rather than obtaining DIP financing. The Cash Collateral Motion states the debtors entered chapter 11 with approximately $20 million of cash on hand and expected average weekly disbursements of approximately $1.6 million over the first thirteen weeks. The Cash Management Motion states the debtors operated 32 bank accounts (21 U.S. and 11 Canadian accounts). The Cash Collateral Motion proposes adequate protection including replacement liens, superpriority claims, budget compliance covenants, and cash payments to the ABL administrative agent. Identified termination-event triggers include failure to satisfy milestones, budget noncompliance beyond permitted variances, and unauthorized cash collateral use under the interim cash collateral order.
Prepetition sale process. The debtors retained SOLIC Capital Advisors as investment banker on November 24, 2025, to conduct a formal sale process. Reid Snellenbarger, Co-Head and Senior Managing Director at SOLIC, stated in a Snellenbarger Declaration that the firm contacted 126 potential acquirers — 58 strategic and 68 financial — and 34 signed nondisclosure agreements. The process produced two non-binding indications of interest submitted on or after the January 30, 2026 deadline, and the debtors used those bids as the baseline for the postpetition process.
Postpetition bidding procedures. The debtors filed a Bidding Procedures Motion to continue the sale process postpetition, covering approximately 220 stores. No stalking horse bidder was designated as of filing. The court's bidding procedures order established a final bid deadline of March 3, 2026 at 5:00 p.m. Eastern, a potential auction on March 6, 2026 at 10:00 a.m. Eastern, a sale objection deadline of March 10, 2026 at 5:00 p.m. Eastern, and a sale hearing on March 12, 2026.
Store closing sales. The debtors retained Hilco Merchant Resources and SB360 Capital Partners (with Gordon Brothers) to conduct store closing sales at 175 locations. The Store Closing Motion states that sales began prepetition between January 26 and February 7 and are expected to continue for approximately 13 more weeks, with a termination deadline of April 30, 2026. Estimated aggregate net proceeds from store closings are approximately $21.3 million. The liquidation agent's base fee is 2.0% of gross proceeds, with incentive tiers of up to 2.5% at higher recovery thresholds. All sales of merchandise and FF&E are proposed to be free and clear of liens under section 363(f). CBC reported 60%+ markdowns in Canadian stores in the week before filing.
Contract rejections. On February 11, 2026, the debtors filed a contract rejection motion to reject seven executory contracts effective as of the petition date. The rejected contracts — with Salesforce, Optimizely, PowerReviews, Id.me, Logistyx Technologies, Stylescape, and Talon.One — relate to legacy e-commerce and wholesale operations the debtors no longer operate. A separate lease assumption and rejection procedures motion establishes the framework for handling lease decisions in connection with the sale process.
Retail expansion and corporate ownership.General Mills acquired Eddie Bauer in 1971 for approximately $10 million. Spiegel Inc. purchased the brand in 1988 for $260 million. Under Spiegel, the store count grew from 57 to 500 U.S. locations by 1997, and revenue reached $1 billion for the first time in 1993, growing to $1.79 billion by 1999. The brand operated nearly 600 stores in 2001.
Decline from peak. By the 2026 filing, the store count had fallen from approximately 600 to roughly 175 operating locations, with an additional 49 stores closed through lease non-renewals before the petition date. Store count figures vary across reporting — AP and Newsweek cited roughly 180, BNN Bloomberg reported 220 total including stores offered for sale, and Commercial Observer reported up to 200. The First Day Declaration identifies ~175 operating stores plus the 49 recently closed.
Three Bankruptcies in Two Decades
2003: Spiegel Group filing. Eddie Bauer's first chapter 11 came in March 2003, when parent company Spiegel Inc. filed for bankruptcy. Eddie Bauer reorganized and emerged as Eddie Bauer Holdings Inc. in 2005.
2009: Standalone filing and sale to Golden Gate Capital. Eddie Bauer filed for chapter 11 on June 17, 2009, in Delaware. CCMP Capital submitted a stalking horse bid of $202 million, and Golden Gate Capital won the auction with an all-cash bid of $286 million. At that time, the company reported total assets of $476.1 million, total debt of $426.7 million, and retained the majority of its 370 stores with 10,000 employees. Eddie Bauer shareholders had rejected a prior acquisition proposal from Sun Capital Partners and Golden Gate Capital valued at around $280 million in 2007.
2026: Catalyst Brands filing. The current filing involves Eddie Bauer LLC as a retail operating licensee — not the brand owner. The entity carries approximately $1.74 billion in secured funded debt despite operating only brick-and-mortar stores under license. The First Day Declaration states the debtors lost more than $172 million over the last three fiscal years (2023–2025).
Path to Financial Distress
The First Day Declaration identifies several factors that drove the 2026 filing.
Declining demand. Customer demand declined below historical trendlines beginning in 2023, attributed to shifting consumer preferences. Neil Saunders, managing director at GlobalData Retail, characterized the brand as "somewhat old-fashioned and a bit irrelevant" among younger consumers, citing competition from brands like Fjallraven and Arc'teryx. Saunders also stated that quality deterioration is particularly problematic for a brand that positions itself as an outdoor performance brand.
Rising costs and tariffs. Catalyst Brands CEO Marc Rosen cited increased costs tied to inflation and tariff uncertainty as contributing to the company's decline. The First Day Declaration specifically references the suspension of the "de minimis" tariff exemption as eroding margins.
Operating losses. The First Day Declaration reports positive EBITDA of $21 million in the last eight months of 2021, followed by negative earnings of approximately $2 million in 2022, $10 million in 2023, $82 million in 2024, and $80 million in 2025.
Unsustainable licensing obligations. The First Day Declaration states the debtors determined in Q4 2025 that they could no longer support approximately $220 million in future licensing fees payable to Authentic Brands Group over six years.
E-commerce and wholesale unprofitability. The First Day Declaration states the debtors' e-commerce operations were only marginally profitable, and wholesale became unprofitable. Both channels were terminated and transferred to Outdoor 5, LLC effective January 31, 2026.
SPARC funding cessation. The First Day Declaration states SPARC had provided approximately $215 million in financial support since the 2021 acquisition and indicated it would cease funding future losses, leaving the debtors with an approximately $215 million intercompany payable to SPARC at the petition date.
Prepetition sale process results. The First Day Declaration and Snellenbarger Declaration show that the debtors contacted 126 potential acquirers and executed 34 NDAs but did not secure a signed going-concern transaction before filing.
Ownership and Corporate Structure
Authentic Brands Group and SPARC. In June 2021, ABG acquired the Eddie Bauer intellectual property and SPARC Group acquired the operating business from Golden Gate Capital. The transaction closed with Eddie Bauer's headquarters remaining in the Seattle area. Under this arrangement, the debtors operated as a licensee of the Eddie Bauer brand for North American brick-and-mortar retail. SPARC provided a wide range of operational and financial support including payroll, insurance, IT, marketing, and treasury management, for which the debtors paid a monthly management fee.
Catalyst Brands formation. In January 2025, Penney Holdings LLC (parent of JCPenney) acquired 100% of SPARC's equity through an all-equity merger. The combined entity operates under the trade name Catalyst Brands and includes Aeropostale, Brooks Brothers, Lucky Brand, and Nautica alongside JCPenney. Catalyst Brands launched with more than $9 billion in revenue, 1,800 store locations, and 60,000 employees. Marc Rosen serves as CEO. The primary shareholders are Simon Property Group, Brookfield Corporation, ABG, and Shein.
Outdoor 5 transition. In January 2026, ABG expanded its partnership with Outdoor 5, LLC (owned by David Oved) to assume responsibility for Eddie Bauer e-commerce, wholesale operations, and design/product development in the U.S. and Canada. The debtors terminated their e-commerce and wholesale rights effective January 31, 2026, retaining only the brick-and-mortar license.
As of the petition date, the First Day Declaration stated that the debtors had approximately $1.74 billion in aggregate outstanding principal and accrued interest across three prepetition funded debt facilities, with substantially all assets pledged as collateral.
Facility
Agent
Rate
Amount
ABL Facility (Loans)
Wells Fargo Bank, N.A.
SOFR + 2.50%
$728.5M
ABL Facility (Letters of Credit)
—
Variable
$196.8M
Term Loan
WhiteHawk Capital Partners LP
SOFR + 6.75%
$600.0M
Subordinated Loan
Copper Retail JV LLC
15.0% (PIK)
$216.3M
Total
~$1.74B
Prepetition Funded Debt
ABL Facility. The First Day Declaration states that the revolving facility provides up to $1.75 billion, with first-priority liens on substantially all assets. The Canadian sub-limit is $6.4 million in guarantees.
Term Loan. The First Day Declaration states that the $600 million term loan, held by WhiteHawk Capital Partners, carries an interest rate of SOFR + 6.75% with a September 2030 maturity.
Subordinated Loan. The First Day Declaration states that Copper Retail JV LLC holds the $216.3 million subordinated facility at 15.0% PIK, maturing February 2031.
Intercompany payable. Approximately $215 million is owed to SPARC as of the petition date, representing the accumulated shortfall between SPARC's covered expenses and funds transferred from the debtors, according to the First Day Declaration.
Lien package. The First Day Declaration and Cash Collateral Motion describe the funded debt as secured by substantially all assets, including inventory, receivables, cash proceeds, and intellectual property rights available at the operating-entity level.
The debtors filed a chapter 11 plan and disclosure statement on February 23, 2026, meeting the RSA's 14-day plan-filing milestone. The plan creates 10 classes of claims and interests. Only two classes — ABL Claims (Class 3) and General Unsecured Claims (Class 6) — are entitled to vote.
Class
Claim Type
Status
Recovery
1
Other Secured Claims
Unimpaired
100%
2
Other Priority Claims
Unimpaired
100%
3
ABL Claims
Impaired
Net Proceeds (less GUC Pool if Class 6 accepts)
4
Term Loan Claims
Impaired
0% from debtors
5
Subordinated Loan Claims
Impaired
0% from debtors
6
General Unsecured Claims
Impaired
GUC Pool (if accept) or 0% (if reject)
7
Intercompany Claims
Varies
0% or 100%
8
Intercompany Interests
Varies
0% or 100%
9
Existing Equity Interests
Impaired
0%
10
Section 510(b) Claims
Impaired
0%
Plan Classification and Treatment
ABL Claims (Class 3). Under the chapter 11 plan, holders of ABL Claims receive their pro rata share of 100% of Net Proceeds. If Class 6 votes to accept the plan, ABL Claims receive Net Proceeds less the GUC Contingent Recovery Pool. If Class 6 rejects, ABL Claims receive 100% of Net Proceeds without deduction.
Term Loan and Subordinated Loan (Classes 4 and 5). Under the chapter 11 plan, both classes receive 0% recovery from the debtors. Claims are canceled and extinguished as against the debtors but expressly reserved and preserved against all persons or entities other than the debtors — a structure that allows the Term Loan ($600 million) and Subordinated Loan ($216 million) holders to pursue non-debtor parties.
General Unsecured Claims (Class 6). Under the chapter 11 plan, recovery for general unsecured creditors depends on the class vote. If Class 6 votes to accept the plan, holders receive their pro rata share of the GUC Contingent Recovery Pool — defined as the greater of $250,000 or 10% of Net Proceeds above a threshold recovery amount for ABL lenders. If Class 6 rejects the plan, all general unsecured claims are canceled with no distribution.
Equity (Class 9). Under the chapter 11 plan, all existing equity interests in SPARC EB Holdings LLC are canceled on the effective date with no distribution.
Release provisions. The plan contains broad debtor releases under Article VIII covering all claims and causes of action, including avoidance actions. All liens on estate property are released on the effective date. The plan includes injunction provisions precluding holders of claims and interests from interfering with plan distributions.
Wind-down structure. On the effective date, the debtors become Wind-Down Debtors. A Plan Administrator takes over responsibility for pursuing remaining causes of action, administering distributions, and closing the chapter 11 cases. D&O tail coverage is maintained for six years post-effective date.
Effective date. The debtors filed a May 6, 2026 notice that the confirmed plan had become effective. The notice marked the transition to the Wind-Down Debtors and Plan Administrator structure contemplated by the plan, after store liquidation and failed going-concern sale efforts left no operating retail business to reorganize.
Bar dates. The debtors' bar dates motion proposes a general claims bar date of April 7, 2026 and a governmental bar date of August 10, 2026.
Employees, Customers, and Stakeholder Impact
Workforce. The debtors employed approximately 2,200 people as of the petition date — roughly 500 full-time, 1,400 part-time, and up to 300 seasonal temporary workers. Approximately 70 served in corporate roles, with the remainder in retail positions. The Wages Motion states that prepetition wages and salaries owed totaled approximately $5.6 million and that annual compensation levels were approximately $61 million for U.S. employees and $6.2 million for Canadian employees. The debtors also reported approximately 60 independent contractors and approximately $330,000 of prepetition contractor obligations. WARN Act notices were filed in Washington state for 60 Seattle headquarters employees with layoffs staged from April 15 to June 1, 2026.
Customer programs. The debtors filed a motion to maintain the Adventure Rewards loyalty program, co-branded credit card, gift card program, refund and exchange policies, and charitable programs through the chapter 11 case. The Customer Programs Motion states the loyalty program had approximately 10 million members, with tiered earning rates from three to five points per dollar and merchandise-credit conversion of $5 per 500 points, subject to quarterly certificate limits. The same motion states approximately $21 million of gift cards had been issued over the prior three years and approximately $5.2 million of gift cards were typically redeemed annually. All store closing sales are final — no returns accepted unless directed by the merchant.
Canadian proceedings. Eddie Bauer of Canada Corporation and 13051269 Canada Inc. operate 24 retail locations across six Canadian provinces with approximately 379 employees. The debtors sought authorization for Eddie Bauer LLC to act as foreign representative in ancillary proceedings under the Companies' Creditors Arrangement Act (CCAA) in Ontario, and the court entered a foreign representative order on February 10, 2026. On February 18, 2026, Justice Cavanagh of the Ontario Superior Court recognized the U.S. chapter 11 as the "foreign main proceeding" under the CCAA, granting a stay of proceedings in Canada. Rosen told BNN Bloomberg: "While the leadership team at Catalyst was able to make significant strides in the brand...those changes could not be implemented fast enough."
Critical vendors and trade claims. The debtors sought authority to pay prepetition claims of critical vendors (up to $2.5 million), foreign vendors ($1 million), 503(b)(9) claimants ($3 million), and lien claimants ($7 million interim, $12 million final). Total prepetition trade payables are approximately $35 million.
Key professionals. The debtors proposed Kirkland & Ellis LLP as lead counsel, Cole Schotz P.C. (Michael D. Sirota) as local counsel, and Osler, Hoskin & Harcourt LLP as Canadian counsel. Berkeley Research Group serves as financial advisor and provider of Co-Chief Restructuring Officers Stephen Coulombe and a second managing director, both appointed January 31, 2026. BRG professionals began advising the company as financial advisors in October 2025. SOLIC Capital Advisors serves as investment banker, retained since November 24, 2025. RCS Real Estate Advisors serves as real estate advisor. Hilco Merchant Resources, SB360 Capital Partners, and Gordon Brothers Retail Partners serve as liquidation consultants. Disinterested directors Jeffrey Stein and Anthony Horton were appointed October 3, 2025.
Frequently Asked Questions
Why did Eddie Bauer file for bankruptcy in 2026?
The First Day Declaration identified declining customer demand since 2023, rising costs from inflation, tariff uncertainty including the suspension of the de minimis exemption, approximately $220 million in unsustainable licensing fees to Authentic Brands Group, and more than $172 million in cumulative losses over the last three fiscal years (2023–2025). SPARC, which had provided approximately $215 million in financial support since the 2021 acquisition, signaled it would cease funding losses.
Is this the first time Eddie Bauer has filed for bankruptcy?
No. The 2026 filing is the third chapter 11 in just over two decades. The brand first entered chapter 11 in March 2003 as part of the Spiegel Group bankruptcy and reorganized as Eddie Bauer Holdings Inc. in 2005. A second standalone filing in June 2009 resulted in a $286 million sale to Golden Gate Capital.
Are Eddie Bauer stores closing?
Store closing sales began prepetition at 175 locations between January 26 and February 7, 2026, and are expected to continue for approximately 13 more weeks with a termination deadline of April 30, 2026. The debtors are simultaneously pursuing a going-concern buyer for some or all of the stores through a sale process with a bid deadline of March 3, 2026.
Can I still use Eddie Bauer gift cards and loyalty rewards?
The debtors filed a motion to maintain the Adventure Rewards loyalty program, co-branded credit card, and gift card programs during the chapter 11 case. All store closing sales are final — no returns accepted unless directed by the merchant.
Does the bankruptcy affect Eddie Bauer's website or online shopping?
Eddie Bauer e-commerce and wholesale operations are not part of the chapter 11 filing. Those rights were transferred to Outdoor 5, LLC effective January 31, 2026. International stores operated by other licensees are also unaffected.
Who owns the Eddie Bauer brand?
Authentic Brands Group owns the Eddie Bauer intellectual property. The debtors, under the Catalyst Brands umbrella, operated as a licensee for North American brick-and-mortar retail. Outdoor 5, LLC holds the e-commerce and wholesale license. ABG retains the right to license the brand to other operators.
Does the Eddie Bauer filing affect JCPenney or other Catalyst Brands?
No. The chapter 11 filing involves only the five Eddie Bauer debtor entities. Other Catalyst Brands portfolio companies — Aeropostale, Brooks Brothers, Lucky Brand, Nautica, and JCPenney — are not affected.
How much debt does Eddie Bauer carry?
The debtors reported approximately $1.74 billion in aggregate outstanding funded debt across three secured facilities: a $925 million ABL facility (loans plus letters of credit), a $600 million term loan, and a $216 million subordinated loan. An additional approximately $215 million is owed to SPARC as an intercompany payable.
What happens to Eddie Bauer stores in Canada?
Eddie Bauer operates 24 stores across six Canadian provinces. The Ontario Superior Court recognized the U.S. chapter 11 as the foreign main proceeding on February 18, 2026, granting a stay of proceedings in Canada under the CCAA. Canadian stores are included in the wind-down process.
What recovery can creditors expect under the plan?
The confirmed chapter 11 plan provides that ABL Claims (Class 3) receive the net sale proceeds. Term Loan ($600 million) and Subordinated Loan ($216 million) claims receive 0% from the debtors but are preserved against non-debtor parties. General unsecured creditors receive a share of the GUC Contingent Recovery Pool — the greater of $250,000 or 10% of net proceeds above a threshold — only if their class voted to accept the plan. Equity interests are canceled.
Who is the claims agent for Eddie Bauer?
Stretto serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.
