Equity firms agree to buy Eddie Bauer

Two private equity firms have agreed to buy apparel retailer Eddie Bauer Holdings Inc. for $286 million in cash, the clothing chain said Monday.

Under the deal, a holding company owned by affiliates of Sun Capital Partners Inc. and Golden Gate Capital would pay $9.25 a share in cash and assume $328 million in debt.

The offer represents a nearly 5% premium over the $8.85 closing price of the shares Friday.

“We believe that the transaction will provide Eddie Bauer with new resources and the time necessary to execute our turnaround strategy,” Chief Executive Fabian Mansson said.

The deal, subject to shareholder approval, is expected to close in the first quarter of 2007.

The retailer, based in Redmond, Wash., had previously been part of Spiegel Inc. but was spun off in 2005 as part of Spiegel’s bankruptcy reorganization.

In May, just about a year after that spinoff, the company announced that it might put itself up for sale.

As of July 1, Eddie Bauer operated 267 retail stores and 108 outlet stores in the U.S. and Canada. During the quarter ended July 1, about 27% of its $225.7 million in sales came from catalog and online purchases.

Eddie Bauer shares rose 14 cents, or 1.58%, to $8.99, The stock has ranged from $6 to $23.50 over the last year.