This story has been updated to include information about the resignation of the Eddie Bauer CEO.
Clothing retailer Eddie Bauer suffered another setback on Friday when the company’s President and CEO, Fabian Månsson, resigned. The chief executive’s departure comes just one day after a shareholders’ vote nixed a proposed sale of the company to two private equity firms.
The embattled retailer named director Howard Gross interim CEO while the board conducts a search for a permanent CEO. Howard has over 35 years of experience in the retail apparel industry, having served as president and CEO of Limited Stores and Victoria’s Secret Stores, as well as CEO of the Hub Distributing, Millers Outposts, and Levi’s Outlet Stores divisions of American Retail Group, Inc.
On Thursday, shareholders rejected the proposed $286 million purchase of apparel company Eddie Bauer by buyout firms Sun Capital Partners and Golden Gate Capital. The firms had also agreed to assume $328 million of the troubled retailer’s debt.
The deal had been approved by regulators, recommended by directors, and endorsed by proxy advisory firms Institutional Shareholder Services and Glass Lewis, according to the Associated Press. But when shareholders had their say, reported The Seattle Times, only 44 percent of outstanding shares were in favor, with 37 percent opposed. A majority of outstanding shares was required for approval, added the Times.
“We’re going to go back to work,” chief executive officer Fabian Månsson reportedly said after the vote. “To us, this is business as usual.” Eddie Bauer will continue as a stand-alone public company, and indeed, Månsson will be returning to his job — but he would have received $10.8 million in separation benefits if the buyout had gone through, the Times noted.
Eddie Bauer recently reported that sales fell to $957 million in 2006 from $1 billion a year earlier; same-store sales fell 2.2 percent.
In January, the company disclosed errors related to its tax accounting for 2005 and prior years. A week later, following a review with its independent auditor, BDO Seidman, Eddie Bauer announced that it would not need to restate its results.