The first catalog retailer to offer credit missed performance requirements tied to credit card biz. DOWNERS GROVE, Ill. (Reuters) - Spiegel Inc., parent of the Eddie Bauer retail chain, said Monday it filed for bankruptcy after missing performance targets tied to its beleaguered credit card business. Spiegel, which was the first catalog retailer to offer credit, said it has secured a $400 million debtor-in-possession financing package from Bank of America N.A., Fleet Retail Finance Inc., and The CIT Group/Business Credit Inc. to keep operating during its restructuring. The company also publishes the Spiegel and Newport News catalogs. It said March 11, it missed performance requirements tied to the credit card business and was forced to divert substantially all its cash flow to repay investors. The retailer's credit cards did not meet requirements because of lower sales and more charge-offs for unpaid credit card bills. That triggered a "pay event," meaning Spiegel had to pay back investors who bought securities backed by its credit card receivables. The company has been trying to sell the credit card unit since last year.
