The Bellevue-based outdoor apparel company is pitching a smaller product line — no more swimsuits or handbags — and stronger emphasis on technical performance. But so far the new strategy has yet to improve the company’s own performance, according to one report.
Eddie Bauer recently launched a national marketing campaign featuring its first TV ad in years and emphasizing the company’s roots and transformation into an “active outdoor lifestyle brand.”
If that sounds familiar, well, it is.
The Bellevue-based company, which has been in a recurring search for its niche as it went through ownership changes and Chapter 11 bankruptcy, said pretty much the same things back in 2002 and around 2009.
Eddie Bauer executives say the difference this time is in execution, with a greatly pared-down product line displayed in redesigned, downsized stores.
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The effort comes as the market for active outdoor apparel is growing — but also growing more competitive.
Founded in 1920 in Seattle by outdoorsman Eddie Bauer, the company has in more recent decades struggled to find its identity.
During the 1990s, under the ownership of Spiegel Group, the company emphasized everything from women’s casual wear to dressier professional attire to home furnishings.
After declaring bankruptcy in 2009, the company was purchased by private-equity firm Golden Gate Capital, which took Eddie Bauer private.
While the company has said for many years that its plan was to focus on its active-outdoors roots, “it’s fairly easy to come up with strategy. Execution is the key,” said Michael Egeck, president and CEO of Eddie Bauer since 2012. “Fundamentally, it’s the same strategy. I think we have just committed to the strategy.”
The company started this latest effort in 2012, Egeck said, shedding “significant portions of the business because it didn’t fit with our active outdoor filter.”
The company exited categories including swimwear, jewelry and handbags, and decreased its workwear and furnishings offerings.
It’s focusing, rather, on “performance products” — outerwear and sportswear with performance characteristics such as wicking or water-repellancy properties.
Four years ago, such products made up less than 20 percent of Eddie Bauer’s total sales; now they account for more than 50 percent.
Its stores have been pared down, too, both in square footage and design.
Earlier this year, the company moved its Bellevue Square flagship store from a 8,390-square-foot location to a space half that size. The store design morphed from a lodge motif to a more spare look with darker walls and ceilings and lots of light, intended to make the products stand out.
So far, 57 of the company’s 370 stores worldwide (335 in the U.S. and Canada) have this new design. And the company is looking to downsize its other locations as leases come up.
Eddie Bauer’s focus now makes sense, said Marshal Cohen, chief retail analyst with market research firm NPD Group.
“Without this particular focus, the brand kind of vacillates in a sea of thousands of other brands,” Cohen said. “When they tip the scales towards outdoor lifestyle, they obviously are in a lot of company, but it’s a lot smaller than when they were trying to go full lifestyle and leisure brand.”
Outdoor apparel is currently about a $26 billion business and is expected to grow about 4.5 percent next year and 3 percent the year after that, he said.
The growth is fueled both by an increase in people participating in outdoor and fitness activities, as well as those who just like dressing that way — yoga pants for day-to-day activities, for example, Cohen said.
The younger generation driving the growth in this category looks for “true, heritage” brands, which Eddie Bauer has in its history, he added.
In reaching this market, CEO Egeck deems his company more “approachable” than rivals such as California-based The North Face, where Egeck had previously been president.
He characterizes a recent North Face digital ad, which features outdoor enthusiasts enduring hardships on their way to triumph, as “literally about the pain and suffering of our pursuits.”
In contrast, he says, Eddie Bauer’s 30-second spot is “really about community and sharing, family, friends. It’s about the outdoors as a playground for your health and wellness and a fun experience, not a battle with the elements.”
How well such changes have been working for the company is hard to discern. Egeck declined to disclose its revenues.
Moody’s Investors Service, though, in a September report about a downgrade of Eddie Bauer’s credit rating, said Everest Holdings, the holding company for Eddie Bauer, generated 12-month revenue of $810 million through last July 2. That compares with $892 million in 2012, according to another Moody’s report.
Moody’s also said that while Eddie Bauer has “a well-known brand name that needs to regain consumer mindset,” the company is also beset by “weaker than anticipated operating trends in a challenging retail environment” and a high level of debt.
The company has also seen an almost 10 percent decline in revenue over the last 12 months, and comparable-store sales declines in eight of the last 10 quarters, according to Moody’s.