Law360 (February 10, 2026, 4:39 PM EST) -- A Delaware bankruptcy judge approved a Chapter 11 schedule Tuesday for the retail operator for outdoor clothing brand Eddie Bauer that will see the company on the block by early March and any unsold stores closed for good by the end of April.

At first-day hearings for the company's Chapter 11 case, U.S. Bankruptcy Judge Stacey L. Meisel approved both a timeline for a potential going-concern sale for the retailer and procedures for going-out-of-business sales at its 175 locations.

Eddie Bauer filed for Chapter 11 protection Monday with just over $1.74 million in funded debt. Its parent company, the SPARC Group, has another $215 million in unsecured claims.

The claim is the funding SPARC has provided to keep Eddie Bauer afloat in recent years, debtor counsel Matthew Fagen said at Tuesday's hearing.

In addition to the long-term troubles of brick-and-mortar retail, Fagen said the company has seen a 20% drop in revenue as consumer spending on outdoor goods came down from a COVID-19 pandemic peak, undercutting by overseas competitors taking advantage of the recently abolished de minimus tariff exemption and more recently rising import prices due to increasing tariffs.

As a result, the company has lost $172 million in the last three years — $80 million of that in the last fiscal year — and SPARC has said it will no longer cover its losses, he said.

Fagen said the company began informally marketing its assets in December, and has gotten non-binding statements of interest from two parties. In the meantime, talks with lenders produced a restructuring support agreement and plan agreed to by the holders of all the company's secured debt, he said.

The proposed plan sets a minimum $250,000 recovery for unsecured creditors, with possible increases depending on the sale results.

The terms of the RSA call for Eddie Bauer to simultaneously market its assets, both partially and as a going concern, while running closing sales at its stores. Under the procedures approved by Judge Meisel, the auction, if required, will take place March 6 and a court hearing to approve the sale to the winning bidder March 12.

The closing sales began a week and a half ago and are expected to conclude for any unsold stores by the end of April, debtor counsel Oliver Paré said. He said it will continue to accept existing gift cards for the next 30 days.

The RSA calls for the debtor to get approval for its Chapter 11 plan within 70 days of the filing date.

The debtor is represented by Joshua A. Sussberg, Matthew C. Fagen and Oliver Paré of Kirkland & Ellis LLP and Michael D. Sirota, Warren A. Usatine and Felice R. Yudkin of Cole Schotz PC.

The case is In re: Eddie Bauer LLC, case number 2:26-bk-11422, in the U.S. Bankruptcy Court for the District of New Jersey.

Additional reporting by Emlyn Cameron.

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