Caught in the Net

Soon, Spiegel may go the way of Montgomery Ward and Woolworth. At least the Chicago-based retailer is moving in that direction, filing last week for Chapter 11 bankruptcy protection. The company faces mounting credit-card woes plus slumping sales from its catalog and Eddie Bauer stores.

Spiegel's overall sales sank 9 percent in 2001 and 18 percent to $2.3 billion in 2002. The company plans to keep running during a bankruptcy process that could last up to a year. It will be "relatively seamless to the customer," according to interim CEO William Kosturos. Analysts, however, say the company may have to sell its Eddie Bauer stores and other assets.

While Wal-Mart has clobbered many retailers, Spiegel may owe its demise to online retailers like Amazon.com. The company still relies on its big catalog, a tool that may be obsolete in the Internet age.

Meanwhile, Spiegel has remained under a legal cloud since the Securities and Exchange Commission on March 7 accused the company of skipping quarterly filings last year. The agency says Spiegel neglected the filings to conceal an auditor's skepticism about the company's ability to stay in business.