Does Eddie Bauer’s path to growth lead through urban areas?
Eddie Bauer’s outwear is meant for active enthusiasts to pursue the great, open outdoors. But the company’s future growth may rest on the shoulders of urban dwellers.
The outerwear and apparel maker, with about 300 stores in North America today, says it sees a clear path to open an additional 200 locations. That expansion can be partly fueled by new locations in major cities where it doesn’t currently have a presence, including New York City and Los Angeles.
Eddie Bauer recently opened a Manhattan store — a fairly small pop-up location that the retailer intends to fully renovate next year. It will be the brand’s first location in the city since 2007.
“We know we have a lot of customers in the area,” Eddie Bauer Chief Executive Mike Egeck told Fortune. He said the company crunched data gleaned from its online business shows the retailer has “at least 20,000” customers in Manhattan, and some 250,000 Eddie Bauer shoppers in New York.
Eddie Bauer’s roots can be traced to 1936, when the company’s namesake founder developed the first quilted goose down jacket in North America. The company’s heritage is a “great American authentic outdoor brand,” according to Egeck, and the company has worked hard to reestablish that image after landing in bankruptcy in 2009.
Over the past few years, Eddie Bauer has focused more on designing technical outdoor products, introducing a line of shoes for the first time ever this year, and the retailer has also developed more gear for the warmer months. Today Eddie Bauer is more like The North Face and Columbia Sportswear, and less like Ann Taylor and Talbots — two chains it found itself competing with at a dark time for the apparel maker.
“There are 45 million outdoor enthusiasts in the U.S.,” said Egeck, in a nod to the customer base Eddie Bauer hopes to tap. Egeck, a retail executive with years of experience in the outwear and denim industries, is an avid hiker.
The adult activewear market is worth over $30 billion in the U.S., according to research firm NPD Group. Though Eddie Bauer, owned by private-equity firm Golden Gate Capital, won’t disclose annual sales, it is fair to assume the brand is pretty tiny. The company was nearly acquired earlier this year for $825 million, a deal with Jos. A. Bank Clothiers that was terminated after Men’s Wearhouse (MW) bought Jos.
Beyond store expansion, Eddie Bauer is also focused on diversifying its apparel line. The company generates 65% of annual sales in the fourth quarter, so it is highly exposed to the cold weather months. And while last year was particularly cold in North America, not every winter will be that severe.
“They can’t just be cold weather gear,” said Ron Friedman, a retail consultant for accounting and advisory firm Marcum LLP. “That’s only good for six to eight months maximum. Diversification of products should be important to them.”
Egeck says those efforts are already underway. The company’s shoe business is meant to be a year-round offering. It also has a travel line meant for the spring and summer months, and sells a new line of lighter, reversible jackets that feature bright colors on one side (for visibility on the mountain) and more muted colors for around town.
“What we find in the outdoor market is there are a ton of people that may only go hiking two or three times a year, or ski four or five times a year, but they still define themselves as a hiker or skier,” Egeck said. “But then they’ll also wear [the clothes] day to day as an identifying badge that says, ‘I am an outdoor customer.'”
And those potential customers are also walking around the streets of Manhattan.