Last night I got to hear the unfortunate news with the rest of the Nau store teams across the country that this Saturday would be the last day of business for Nau. It was a very quick and sudden shock. As an employee for Nau I got to have the unique distinction of being the very first hire outside of management and was a part of the opening of the first store as a company here in Boulder. I also had the privilege of meeting so many awesome individuals that were a part of this team from the bottom up. And we had some incredible people (and names) connected with the launch of this new apparel company. It feels like just yesterday we were meeting in the Boulder Marriott talking about our new approach to retail, our up-coming store launch, and of course the very first line of clothing we were about to introduce. That was barely a year ago (March ’07).
Now, I know that this is a part of being a startup. Especially in retail, it is a very rocky road and at no time did we ever feel, or act, that we were in the clear. We knew that in a way everyday was a battle to keep this new company growing but we seemed to be succeeding. I can not and will not believe this was based on lack of sales because it wasn’t because of that. In fact, on a retail level I would certainly say that for a first year apparel company we succeeded on that level! And we knew every new customer was important, every sale big. But with that, I can’t help but feel that there are a lot of questions left. I can’t understand how this end came so sudden. I also can’t help but feel for those really effected by it. I have had my hands in other pots these last few months and am about to start a new and exciting adventure Monday…but for those that were full-time, for the management, for the new employees in L.A. whose store just opened last week and left their jobs in order to train, build out, and then work the store for only a week – what about them? I have to ask Nau why they continued some of their actions knowing that the end was so close. As a company dedicated and built upon so many positive things and dedicated to doing right especially for their employees – I just have to question now that with this sudden end they had to have lost some sight in doing what was right and appropriate. Even though Nau will try to go out gracefully, it could have been handled a lot better. I am left feeling that somewhere a complete lack of planning occurred. I know I don’t know the entire situation and I am writing somewhat on anger but more so I am just disappointed. The way the end came about and the reaction I know I have felt and some other employees have felt from the company, that it just doesn’t seem to correlate with the values we established Nau on and, as employees, we bought into and pushed.
On a business sense too, I wish I could have more answers. It is not my place right now to share my thoughts on this area. I do feel though that I have learned a tremendous lesson when it comes to startups as I watched Nau grow and die.
With that said, I am really going to miss Nau. We did some great things, showed for the most part what doing business good meant, and I think in a way we set the bar higher especially for outdoor apparel. We definitely set off some waves and made people and competitors think. We also made a ton of friends in the process! That is what I will certainly miss the most.
I recommend going over to nau.com though and read the official announcement. Plus, everything on the site is 50% off and everything in the stores as well will be 50% off until close Saturday. Stores are located in Boulder, CO; Bellevue, WA; Tigard, OR; Chicago, IL; and the Beverly Center in Los Angles, CA.
Cheers, Nau! It’s been fun knowin’ and being a part of you!
UPDATE: I just spent a couple of hours at the store this afternoon saying goodbye to so many of our awesome customers! A lot of people heard the news today and came to take up on the sweet deals…in fact the place was packed and the store is a mess but for good reasons! The stores are definitely going out with a bang today and who knows what tomorrow will bring. I’ll have to peek my head in throughout the day to see who else stops by and give it one more final adieu!
Dammit! I really wanted to buy stuff from them, and now I waited too long. I need to get in that store!
And sorry Neil, I know you were pretty emotionally vested in this thing. It’s a bummer to see a great concept fall.
[...] What is weird to me about Nau, is that (this information is from the employees) they were meeting their sales goals. They were being written up in almost every major national publication. Their design was amazing, their marketing was fantastic and their stores engaged and inspired. But somehow, something happened. They closed up shop. An employee Niel Robertson wrote his thoughts on the matter. [...]
I found out about this form Andrew Hyde’s twitter stream. Sorry to hear this.
My company Falling Fruit also just recently collapsed, all of a sudden. I doubt executives could really see it coming. Our exec team warned us things might collapse in a couple months, and the next day it was all over. Almost no one can see these things, and “warning people” too early can be a self-fulfilling prophecy for an executive team trying desperately to keep morale high with their team, as well as keeping their own spirits high.
Wishing you success in your next venture (and apply for unemployment–it’s a pain in the ass to fill out, but can really help). Let me know if I can help connect you with anyone in the Conscious Business world. I was the co-host of a podcast entitled “Conscious Business” interviewing people like Josh Onysko of Pangea Organics, etc.
Sorry to hear about Nau. I really liked the philosophy of the company, and clearly the employees were passionate about the mission of the company. Unfortunately, it’s a concept that’s ahead of its time. I think most people are beginning to realize the impact we have on our environment. It starts with putting the right light bulbs in, recycling, driving less, and turning off the computer. Eventually it will mean buying sustainable clothing. We’re not there yet.
I’m surprised that you didn’t see this coming. When Nau announced a while back that it had donated $233,000 to charity (5% of its earnings), simple math told me Nau only made about $5 million last year. That’s barely enough to cover 90 employees salaries, let alone fund an aggressive retail strategy.
Curious if you would comment on what you think the company could have done better?
[...] Nau employee, grateful for his opportunity with the company, nonetheless questions how management handled the [...]
Duff: Yes, I totally understand what you mean that often it is best to keep spirits high and to keep business going as usual as long as you can. Perhaps, being that there is hope to keep it afloat. I guess I was just bummed that we opened up a new store and thus effecting those employees just a week later. But in hindsight I really do believe that the execs at Nau continued to hold hope ’til even the last second. Believing perhaps the opening of the L.A. store would generate new interest. I still think though that with the sudden close as it occurred that something must have changed very recently that this seemed to be the only way out.
And I am sorry to hear about your own venture…it’s never fun as it seems like an idea that somewhat becomes your own baby has passed. And thanks for the offer of help! Fortunately for me I wont have to deal with unemployment and am actually starting a new venture tomorrow…another startup too!
JohnO: I may have to disagree with you that we’re not there yet when it comes to sustainable clothing. I think we are there actually and I think some of the successes of Nau prove that. One of those successes were the interest Nau garnered from other companies regarding the way we did business with sustainability being in the groundwork in almost every area we operated. We definitely started a lot of conversations and even, I believe, produced some changes in how people thought, dressed, or companies thought, operated…the list can go on. Like I wrote, I don’t believe sales were exactly the problem. I can’t give actual numbers on sales but even if you want to take the number you mentioned…I would say that is not too shabby considering it came from just 4 stores (LA opened roughly a week ago) and a website. Actually, that’s really not that bad and if you took it as an average any retail store would love to put up those numbers considering our size of stores! But I am also not going to say that the figure you gave is exactly accurate.
I am going to have to be careful though on what I say regarding what I think we should have or could have done. Of course, it’s also easier to say this when you have the benefit of hindsight and never was in the hot-seat in the course of this company. I agree though with what Andrew Hyde wrote about in his article ‘Startups Fail’ that I wish startups were more open about their failures and showing the world that it’s not a black-eye but more a lesson we can all learn from. But if you’ve read some of the other articles regarding the end of Nau you will read a lot about what they consider negatives and a lot of them target the practices we put in place from our 5% giving on purchases, the 10% off if you chose to ship instead of taking away, the sustainable materials that have higher costs…all of that. I don’t believe though that any of those things were problems. I believe you certainly can be profitable with similar practices in place. A few of those articles did mention though that our profitability was based on a high number of stores. In fact, you have probably read that the original growth strategy was very aggressive. I may agree that it was too aggressive. I would also add that I think we were perhaps a little too ‘top-heavy’. Meaning our growth in all areas of our company should have matched the growth on the ground. Nau had a terrific team from the bottom up; in the stores, in the home-office, everywhere Nau operated we had tremendous people behind the work. But we also seemed to have too many people. It might be too soon for me to go into more details than that; especially as I know many people connected with Nau are also probably reading this right now and it’s a very uneasy time. We are all heart-broken over this. I also don’t want my thoughts to be considered ‘bashing’ or an ‘attack’ on Nau because that is certainly not my intent. I really loved everybody that I met and worked with. It’s in fact my feelings for them that make me mourn for Nau today. But I also want to take this experience as a lesson as I go forward on my own path and I also would like to know that our great customers had some answers to why their favorite store is suddenly no more. If I can shed a little light…I think that’s ok. Besides, Nau’s story isn’t all finished. Like I said, it started a lot of conversations and I believe even in death its impact will be felt for a long while and maybe for good if another company decides to come along and have just as aggressive goals and ideals and hopefully succeeds!
The reasons for nau’s failure, are manifold. However, the most notable is
a) that the company did not understand it’s target customer, nor did they provide them a compelling product…regardless of the hype.
Whether they were selling merch, I don’t know. But, any business should be prepared to fund itself for several years…BEFORE opening the doors.
Also, I’d point out that their webfront idea might have worked if they had started out as a catalog only business. Customers would then be accustomed to waiting for their purchases. This also would have saved them tons of cash and heartache, allowing them to continue operating for years. Architectural fees, interior design, lighting, and engineering is not cheap. Nor are rent, employee wages, utilities, etc.
So, it would seem that their sales weren’t enough to keep it going…
Thus, logic dictates that if the sales weren’t there, there’s a reason.
Thanks for your follow-up comments.
I don’t want to discount the message Nau tried to bring to the marketplace. It was refreshing and very progressive. I have no doubt that Nau really did “start a lot of conversations and even produce some changes in how people thought, dressed, or companies thought.”
When I say that we’re not there yet, I’m talking about affordability. The concept of sustainable apparel is one that makes complete sense and I think most people would support it…if it’s affordable. In my case, I live in an environmentally enlightened state and was green before Al Gore. I went to the Nau store wanting to buy something, but left with nothing – the prices were too high. It was clear that the Nau’s target consumer was not me…it was me with more money! (Can you honestly say that if you didn’t work there, you could have afforded Nau apparel?)
I think “Later for Nau” summed it up perfectly.
One of the very key components that I don’t think the company ever understood is that is an innate ‘connection’ when buying clothes. I want to try it on….look at myself in the mirror….maybe have the store clerk comment on this or my significant other. At any rate, I very rarely buy clothing over the internet….have always been disappointed (wrong color, wrong sizing, wasn’t what the picture looked like, etc, etc.)
Don’t get me wrong, lots and lots of people DO order via the internet and catalogues, hence the success of LL Bean and Land’s End and others. I just don’t think the public was ready to plunk down $400 for a “eco-friendly” sweater made out of recycled goat hair.
Bottom line: They DID NOT understand the fickleness of the end user, their target audience, their customer. If you want me to pay $400 for an article of clothing, I want to walk out of the store with that on my back. I want an ‘emotional’ attachment to that piece of clothing and I want to wear it that day….I don’t want to wait 2-3 weeks for something to come via UPS and only get 10% off the price.
They just didn’t understand their target audience: Sophisticated, urban, hip consumers…..who would pay a lot for those garments but wanted them then and there. This is the instant gratification generation…not the wait 3 weeks generation.
Good luck!!
Matt: I don’t think you really knew Nau. Compelling product? It was praised throughout the industry and even recognized for it’s style & sustainability in arenas who’d never even look to outdoor apparel when it came to style. And target customer? It had everything from clean and simple for the Patagonia crowd to sleek and stylish for the urban crowd. In fact, that was an area Nau did excel. It connected with customers (which all you have to do is read the sentiment all over the web now with its closing) of all types…we had loyal customers from a pair of older couples Overland Kansas who were visiting and fell in love, to a couple from Austin who had a second home in town and got all of their friends when they visited into it, and then we had the loyal local crowd who were everything from students to start-up warriors to ad execs…our target was wide. We wanted to connect with people who were looking for style, who were looking for sustainability options, or who were simple looking for high-quality outdoor apparel.
I’d also say that $34 million is quite enough to get a retail operation going…and way too much for simply a catalog. Plus, a catalog would simply go against what we were doing in the sense of sustainability.
And again, sales weren’t the big issue. I wrote before that other companies that had retail stores in store size and/or size of our line would foam at the mouth for how well we did considering we did it in our first year and we did it with an unconventional way of marketing..now could this have been a problem…I would certainly admit that I think it was a flaw.
Also, the shipping option with the 10% discount was an OPTION! An OPTION that we hoped to be used at least 20% of the time but it turned out to be utilized mush more than that! Which saved the company tons in both money and on an environmental level as we NEVER had to use freight shipping which in the retail industry is standard…Nau changed the rules on this!
JohnO: Could I have afforded it had I not worked there? Well, certainly not all the stuff I received from working there! You are right that it was on the high end but it did compete with other high-end alternatives. I would say though that yes I did wish the price point was lower. I also think that when it comes to sustainability clothing too that yes we aren’t there yet when the cost of the materials will be closer to virgin materials. We are getting close though; new recycling programs are out there that are taking in more materials as well as higher volume. Plus, our processes in creating the finished materials Nau for instance used from alternatives is getting more sufficient and the demand is growing meaning they can make more of it and sell more of it rather than requiring only a small group that is wanting a fabric to pay a premium on it knowing that they aren’t going to get rid of all of it. So the time is near when these fabrics I believe will be more common-place.
Steve: I also think you never really actually knew what Nau was about. First, there was never an article of clothing even near $400. The most was around $300 and they were similarly priced to other high-end jackets from companies such as Arteryx. And again…shipping was an OPTION!!! In fact, that is why we called our store ‘webfronts’! It was so you could in fact ‘connect’ by trying on the clothes, really understanding your size and then order it from the store for a discount OR just take it home. And more than 90% of Nau’s line was under $200…not near the $400 figure. I mentioned before that yes the price-point was high, partly if not mainly due to the selection of materials used…virgin materials are much more cheaper than the alternatives Nau used. Also, the shipping option never took 2-3 weeks, it was processed from the warehouse the same day if possible or no later than the next business day. Plus, there are too many catalog companies that are very successful to say that there isn’t a demand out there for people who are willing to simply order their stuff. In fact, that was a reason for the webfronts…there is a lot of waste in time, money and energy when it comes to mail-order as the return rate is around 40%. The webfront greatly cut that number as the person did get to know their size, color, and such.
And by the way: Nau used ‘sustainable’ material options which included natural fibers which are not recycled into clothing. They were virgin in that sense but because they are renewable they are also sustainable. That is one reason why wool is coming back so strong. And the ‘goat’ sweater you are referring to was a cashmere and angora mix. Of which, I would like to say that even though our price point was high…you never could tell me that there was cheaper and higher quality cashmere anywhere else!
Best of luck to you! I appreciate your passion and hope you do well on your next gig. Thanks for your comments.
Best of luck to you! I appreciate your passion and hope you do well in your next gig. Thanks for your comments.
The reason Nau failed, price points, too much wording on the walls (dumbing down the vision), A website that was all flash, the retraining over and over again of the employees, a horrible pos system, marketing/advertising (close ups of clothing as if they where a recognized brand, how bold) , store locations, and poor visual displays (paper snow? wires, washers and whatever else was laying around the warehouse? Great idea, concept and business model, but giving employees no warning that they are closing, shame on them. Good luck finding a Job in this market, really, I feel for you and all those out of work.
Mike…
Price Point: Yes, I’ve conceded it was high..perhaps too.
Too much wording on the wall: Uh…what? ‘Sustainability’, ‘Beauty’, ‘Performance’ is too wordy?
Flash Site: I loved the look, didn’t like performance of it.
Training: Twice a year is too much? We had to go over the new lines. That’s more than most stores, twice, but that’s why our employees were on top of it!
Advertising: I conceded to that parts of the campaign were probably wrong.
Store Locations: UH…serious? Like Boulder, Portland, Seattle, and Chicago aren’t necessary locations for outdoor apparel of all weather-varieties? As well as a large base of outdoor gear consumers?
Visual Displays: Nau never really had any! Minus mannequins & pictures.
Closing: I didn’t like it either. Fortunately I wasn’t at all affected but others were and it is a tough time…although in all the places we supposedly had bad store locations they still offer a lot of opportunities.
JohnO: Thanks so much mate! Good luck to you as well!