Skip to main content

Report: Eddie Bauer, PacSun Considering Merger

Though this year has been calmer on the bankruptcy front, some stores are still struggling to find sure footing. Two of them, Eddie Bauer and Pacific Sunwear, may end up treading the rocky road together.

Eddie Bauer and PacSun are considering a merger that would see the two retailers sharing a store fleet, according to Reuters.

Analysts had predicted that 2018 would be the year of mergers and acquisitions. While the pace in the apparel space doesn’t feel as swift as the headlines would lead one to believe, there’s no question that companies are looking to partner up in an effort to bolster their capabilities, or at least in the case of this potential coupling, streamline their operations.

Reporting on comments from unnamed sources, the news outlet said private equity firm Golden Gate Capital, which owns both chains, has yet to decide on a definite course of action.

Struggling under a $225 million term loan and a $200 million revolver, Eddie Bauer announced in June that it was exploring strategic alternatives—a phrase that too often in the last year or so has meant the possible beginning of the end. The outdoor apparel and gear chain turned to Guggenheim Partners LLC and Financo to search for a buyer and layout its options. It has been in Golden Gate’s portfolio since 2009 after languishing in bankruptcy for years.

Golden Gate acquired PacSun out of bankruptcy in September 2016. The teen retailer struggled right along with others in its category like Quiksilver, Delia’s and Wet Seal. The company was $160 million in debt when it finally hired financial advisors, as the maturity loomed.

If a merger does take place, it will be the latest chapter in retail’s reinvention. Mall staple The Limited, which folded in early 2017, has found new life under Sycamore Partners as an exclusive brand at Belk department stores. Discount retailer Gordmans landed in bankruptcy in March 2017 only to be purchased by Stage Stores a month later and eventually converted into an off-price chain.