Spiegel gets OK to sell Newport

DOWNERS GROVE, ILL. — Embattled catalog retailer Spiegel Inc., working its way through a painful bankruptcy and a gradual dismembering of its retail operations, has received a green light from a U.S. Bankruptcy Court judge to sell its Newport News women's fashion unit.

Spiegel said it's selling the Newport News unit to Pangea Holdings Ltd., an investment company, for $28.6 million.

Separately, in a further winding down of operations, Spiegel put up for sale its profitable Eddie Bauer division.

The bankrupt retailer reported a narrowed first-quarter loss of $100.5 million, down from a year-before loss of $114.2 million, as it slashed costs and put behind it a $71.9 million loss from discontinued operations that pulled down the bottom line a year ago.

Spiegel retail sales tumbled 25.9 percent, to $264.4 million from $356.7 million last year, a shortfall of almost $100 million.

Working to cut its losses, Spiegel whittled its costs 27.7 percent, to $139.8 million from $193.2 million, yielding a savings of more than $53 million.

Measured as a percentage of shrinking sales, costs declined to 52.9 percent from 54.2 percent. Average gross margin contracted to 35.5 percent from 36.8 percent.

Taking a big bite out of the bottom line, bankruptcy costs amounted to $11.9 million, up 51.6 percent from $7.8 million the preceding year.