This Popular Sportswear Store Just Filed For Bankruptcy And The Reason Couldn't Be Clearer

On February 9, 2026, a popular sportswear retailer announced it filed for bankruptcy, becoming the latest in a long line of major corporations falling victim to the turbulent economy of early 2026. Eddie Bauer's brick-and-morter location operator, Eddie Bauer LLC, announced it was entering Chapter 11 proceedings, marking the third bankruptcy involving the brand since 2003. This news comes just weeks after UPS announced thousands of layoffs, and Amazon is gearing up to do the same.

The company filed for bankruptcy in New Jersey to seek protection for its retail stores, and it's hopeful a buyer will seek to acquire its over 175 brick-and-mortar locations throughout the United States and Canada. That's already a significant reduction from the 371 Eddie Bauer stores there were ahead of the brand's second bankruptcy filing in 2009, which suggests the company's decline has been a long time coming. As of January 31, 2026, the operator terminated its rights to the e-commerce and wholesale portions of its business, so the bankruptcy proceedings won't affect the online sales for Eddie Bauer apparel and sportswear.

A growing number of major stores are closing locations in 2026, and bankruptcy filings are up in multiple industries. Several signs indicate fast-food chains like Jack in the Box may not survive, while other fast-food chains continue to disappear across the U.S.

When popular retailers like Eddie Bauer file for bankruptcy, it's rarely for a single reason. So what is the major catalyst behind this popular sportswear store's demise? Well, for starters, Eddie Bauer stores have seen insurmountable losses in sales revenue over the last three years. According to its case summary, those losses have totaled over $172 million, with 2024 and 2025 each seeing losses to the tune of around $80 million (via Bondoro). Additionally, the company's debt has also proved a serious hindrance to its operations. It has more than $1.5 billion in unpaid principal and shows a shortfall of $215 million. With falling sales, these numbers don't look good on the company's books.

Declining sales and an overwhelming debt load aren't the only problems Eddie Bauer needs to overcome if it wants its retail operator to join the ranks of companies that came roaring back from bankruptcy. The popular outdoor clothing retailer hasn't kept pace with the younger generations, with many shoppers opting to buy products from competing brands instead. Others have noted that Eddie Bauer's recent product lines seem to be much less reliably made than they were earlier in the brand's history, which could be a death blow to a brand known for selling durable winter wear.