Eddie Bauer Holdings third quarter revenues were $211.3 million, a decline of 2.8% compared to $217.3 million reported for the same period last year. Net merchandise sales were down 2.6% to $199.3 million compared to $204.7 million last year. Comparable store sales for the third quarter declined 1.5%, however, the company is seeing a slight turnaround in the fourth quarter with comp-sales-to-date increasing 1.6% for the period.
Gross margin for the third quarter declined 190 basis points to 30.5% compared to 32.4% last year. SG&A expenses increased 120 basis points to 42.3% of sales compared to 41.1% of sales last year.
Licensing royalty revenues were $3.2 million compared to $3.6 million last year.
The company's net loss for the third quarter of 2006 was $197.6 million, or a loss of $6.58 per diluted share, compared to a net loss of $10.0 million, or 33 cents per diluted share, in the third quarter of 2005.
In other news, Eddie Bauer Holdings, Inc. signed a deal with Eddie B Holding Corp., a company owned by affiliates of two private equity firms, Sun Capital Partners, Inc. and Golden Gate Capital. The deal calls for Eddie B Holding Corp. to acquire all outstanding shares of Eddie Bauer Holdings, Inc. at $9.25 per share in cash.
The per share consideration represents a 12% premium to the prior four weeks' average closing price of Eddie Bauer's common stock. The total transaction value is approximately $614 million, including debt to be repaid of approximately $328 million.
The interesting aspect to the deal is that one of Golden Gate Capital's current investments is Catalog Holdings, and one of Catalog Holdings brands is Spiegel, Eddie Bauers parent company before it was spun off as an independent public company.
