Eddie Bauer LLC and Pacific Sunwear of California LLC are exploring a merger to consolidate their store footprint and weather a prolonged downturn in the U.S. brick-and-mortar retail sector, Reuters reported. The two sporty retailers have previously succumbed to bankruptcy and are searching for growth. In a merger, the companies could whittle down their store counts from their current total of nearly 700 together. Eddie Bauer and Pacific Sunwear are controlled by a common owner, private equity firm Golden Gate Capital. Eddie Bauer, which sells outdoor gear and apparel, is at risk of not keeping up with fashion changes, according to credit ratings agency Moody’s Investors Service Inc. It has a $218 million term loan and a $200 million revolving credit line. Anaheim, Calif.-based Pacific Sunwear emerged from bankruptcy in 2016 under the ownership of Golden Gate after the buyout firm converted its debt into equity in the restructuring. It emerged with a $100 million revolving line of credit from Wells Fargo.
