Eddie Bauer Takes Next Step in Turnaround?

Eddie Bauer EBHI (NASDAQ) was first mentioned in the blog back in April when the company appointed Howard Gross, a member of the board, to serve as interim CEO. Gross was appointed interim CEO after the company essentially forced Fabian Mansson to resign after he failed to sell the company to private equity firms. On June 15, Eddie Bauer announced the hiring of Neil S. Fiske as the new CEO. Fiske, a highly successful retailer, was in charge of the Limited's Bath and Body Works, a company that had been languishing before his appointment as its CEO. Fiske helped turn the company around. Fiske's appointment is a good sign that Eddie Bauer is looking to turn itself around or get a good price for sale of the firm. Fiske is an exceptional retailer who brings necessary talent to the firm.

He did not come cheap. His compensation package was quite high. According to Craig Harris a reporter for the Seattle Post-Intelligencer,

"Fiske will receive a compensation package worth at least $3 million in his first year to take over struggling clothing retailer Eddie Bauer Holdings Inc., according to a securities filing.

And the turnaround expert persuaded Eddie Bauer to pay for his legal costs in negotiating the deal."

Despite the high salary, Fiske seems to be a good choice to head the company. Keep a close eye on how Fiske manages the firm over the next 3 - 6 months. There may be some real upside potential if he makes the right steps.

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