The parent company of Eddie Bauer and Pacific Sunwear of California is considering a merger of the two retailers in an effort to consolidate stores, as well as survive a prolonged downturn in the American brick-and-mortar retail sector.
Citing sources familiar with the situation, CNBC reported that Eddie Bauer and Pacific Sunwear, which have both filed for bankruptcy in the past, are looking for ways to grow. In a merger, the companies could also bring their store counts down from their combined current total of nearly 700.
Both retailers are owned by private equity firm Golden Gate Capital, which has not decided whether to merge the two companies and has declined to comment. Eddie Bauer also declined to comment, while Pacific Sunwear could not be reached for comment.
According to sources, Washington-based Eddie Bauer hired investment banks last year to explore strategic alternatives, including a potential sale. The retailer, which specializes in outdoor gear and apparel, has a US$218 million term loan and a US$200 million revolving credit line. One source said that the company’s same-store sales are up 5% so far this year.
Full Content: CNBC
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