Spiegel lays off 255 workers and seeks buyers for retail divisions

With its roots as a cataloger going back to 1865, The Spiegel Group is taking steps to exit the retail business by laying off 255 workers over the next two months as it seeks to sell its three retail divisions: Spiegel Catalog, Eddie Bauer and Newport News.

Spiegel reported a 17% drop in net sales for the five weeks ended April 3, to $130.2 million from $157.8 million for the comparable year-ago period. For the 13 weeks ended April 3, net sales dropped 22% year-over-year, to $322.4 million from $413.6 million.

Spiegel said combined March catalog and e-commerce sales decreased 22% from a year ago, reflecting lowers sales for both the Eddie Bauer and Spiegel Catalog divisions. March catalog and e-commerce rose slightly for the Newport News division, it said. Spiegel operated 436 stores at the end of March, down from 558 stores a year ago. It also operates retail web sites Spiegel.com, EddieBauer.com and Newport-News.com.

Spiegel has reached an agreement with Pangea Holdings Limited to acquire substantially all of the assets of Newport News for $25 million in cash and the assumption of liabilities. As part of Spiegel’s Chapter 11 bankruptcy process, the completion of Pangea’s purchasing agreement is subject to a review of any additional bids that would be put to an auction process on May 11, a Spiegel spokesman says, adding that Spiegel expects a sale of Newport News to be finalized by the end of May.

Spiegel has also directed its financial advisor, Miller Buckfire Lewis Ying & Co., to solicit buyers for Spiegel Catalog and Eddie Bauer.