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point-of-view
Commentary
Eddie Bauer's Still Up There
- by Robert Passikoff , Op-Ed Contributor, June 19, 2009
Eddie Bauer has been struggling to repay its debt. And the fact that consumers slowed down spending on anything but necessities can't have helped. In fact, the falloff came as Eddie Bauer was attempting to pull off what would have been a multi-year turnaround.
"Eddie Bauer is a good company with a great brand and a bad balance sheet," said Neil Fiske, the company's CEO, though the retailer also said stores, catalog business and Web sites would continue operating, and that it will honor all customer gift cards, returns, and its points program.
According to our 2009 Customer Loyalty Engagement Index, Eddie Bauer was just edged out of 1st place by J. Crew, another iconic clothing brand, whose ascension was largely aided and abetted by the patronage of Michele Obama, with L.L. Bean a distant #3.
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On the marketing side of things, Eddie Bauer recently celebrated a new line called "First Ascent," outfitting two mountaineers as they took on a climb of Mount Everest. On the financial side of things, there are plans in place to sell the company for $202 million to CCMP Capital Advisors.
A judge still needs to approve the sale, and other potential bidders still could emerge. But based on engagement and customer loyalty levels, whoever ends up buying the brand is pretty sure to end up on top of the world.
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I remember living in the Chicago area in the late 1980's and I shopped Eddie Baue regularly for sweaters and coats. As I've traveled and moved since then, I was always delighted to see an Eddie Bauer store and remember the great products and good values they had. However, over the years I have been consistently disppointed in the lack of offerings and spareness of the stores's inventory. I do hope they can recapture the past.
Eddie Bauer, like many of the chains, over did with opening too many stores with too much overhead and then raising prices. There is just too much merchandise all over with too much the same and this scenario will continue to occur until merchandise operations separate profit with a high percentage of "growth" annually necessary for a successful business. Of course, corporate ownership desperate for stock sales are as much a part of sucking up profits as paying old bills with borrowed money for new locations.
On top of the world in a category that's under water (J Crew? LL Bean???).
Nice call.
I'm surprised that no one commented on how this company completely lost its brand. It was once known as a legitimate outdoor retailer offering a little gear and some great technical apparel. Then, they decided to compete in what I would call more fashion apparel (Speigel owned at the time). Thus, the company lost the tie to its heritage. And we have seen how that turned out over the past 15+ years - in and out or financial trouble. However, we've seen their recent commitment back to their heritage. But, is it too late? To survive, they'll need to get back to their roots in execution not just in their Mt. Everest sponsorships. And, that's a long climb.
I gotta agree with Jonathan. E.B.started losing its authenticity about the same time the first faux cowboy wearing an Eddie Bauer barn coat was spotted strolling down Rodeo Drive. "Eddie Bauer is a good company with a great brand and a bad balance sheet"? Couldn't you say the same thing about Plymouth, Circuit City and Washington Mutual?