Eddie Bauer Stock Drops On Debt, Earnings News

By MICHELLE CHAPMAN

NEW YORK (AP) — Eddie Bauer Holdings Inc. shares lost more than 40 percent of their value Thursday after the outdoorsy clothing retailer warned the recession had put it in jeopardy of violating some loan requirements.

The company, which also posted a wider fourth-quarter loss late Wednesday, said it needed an amendment to its borrowing agreements quickly needed to help sidestep doubts about whether the business could keep running.

That hammered the company's stock, which fell 36 cents Thursday, or 46.2 percent, to end the day at 42 cents. The stock has traded as low as 30 cents and as high as $8.72 over the past year.

Like many retailers, Eddie Bauer has been squeezed as consumers keep discretionary spending low due to economic and job concerns. Increased promotions, to lure shoppers to spend, also hurt Eddie Bauer's quarterly performance, said Chief Executive Neil Fiske.

The Bellevue, Wash.-based company said it is at risk of violating the terms of a $225 million term loan and wants to amend its terms to prevent company accountants from officially declaring their doubt that it can continue as a "going concern."