Doors Closing Nau: Iconic Eco-Business Winds Up
by Warren McLaren, Sydney 
on 05. 3.08
Today is a very sad day. For Nau announced they are winding up. The Portland, Oregon based outdoor lifestyle apparel company has been unable to secure the necessary venture capital to continue operations as a start-up business.
Having got off the phone today with Ian Yolles, one of the original founders, I doubt very much there has been a dry eye in the Nau house. Obviously as the capital investment market lost its courage in the face of current uncertain financial times in the US, things became, as Ian put it “tenser and tenser.” But he had nothing but praise for the staff of Nau who have shown, “an amazing commitment and spirit right up to the end. There has been this strong sense of hopefulness....” He pauses, then continues, the emotion palpable even down the phone, “... that something good would happen.”
But alas that has not been the case. The only long shot now, is if someone out there, as yet unknown to Nau, but with deep pockets, and a passion for doing “business unusual” may step forward and breath fresh financial life into the company. We sure hope a knight in shining armour will appear.
The Business
For there was nothing wrong with their operations. In their first year of trading they actually exceeded sales expectations. They engendered incredible customer loyalty. And it's easy to see why. Their product was exceptional value. Mostly because the quality of materials and construction detailing was quite incredible (I speak from experience, having spent a decade on the factory floors of outdoor companies.) Plus their designs were functional, sharp and enduring.
In other aspects of the business they also achieved more than was planned for.Like how, at end of a purchase transaction customers were asked to select from a array of Non Profit enterprises, to who 5% of their purchase price would be forwarded. Nau were initially concerned that customers might find this extra step a burden, so put in an easy option: ‘Let Nau decide.’ But only 7% did. 93% of their customers were, in Ian’s words, “... interested enough to engage, to pause for a moment, to participate in civil responsibility.” And in less than a year Nau were able to donate $223,000 through this customer-directed giving program, they tagged Partners for Change.
One of the other greatest unknowns was the whole ‘ship-to-you’ model, (whereby goods were sent direct from a warehouse to the purchaser, rather than taking them home from the retail store). According to Ian, “everyone said it was a crazy idea. We projected that about 20% of customers might go for it, but the figures show that 45% opted for ‘ship-to-you’.”
The Rough End of the Pineapple
So, no it wasn’t that the business model itself was flawed, rather that it ‘lived in interesting times.’ As Ian saw it they fell victim to the three consecutive blows:
“1. evaporation of the venture capital market
2. retail businesses going through big challenges at the moment, very skittish
3. for all our successes, we were still an ‘early start-up. A risk.’ ”
The Dreams
And things were sure moving forward. They’d only opened their Los Angeles store 10 days ago. Another four stores were planned for this year in San Francisco, Boston, Seattle and another one in Portland. They were due to relaunch their revamped website on Tuesday next week. A television program about Nau is scheduled to air soon on Sundance Channel. Media pre-release viewings of their Fall 08 collection were all set for this coming Monday. And this was to have included a line of bags and travel accessories.
Some of the garments you won't nau see.
The People
A lot of the folk at Nau, moved to Portland from various parts of country to work for the company, because the believed in what it stood for. A new model for doing business, that also did good. Ian doesn’t know what he will do next. He has been living and breathing Nau for the past three years. And it sounds like most of the staff were similarly in shock. “It’s like being at your own funeral”, said Ian.
And I had a distinct sense of that. I felt the same awkwardness one experiences meeting with someone who has just lost something or someone close to them. I struggled for the words to convey my concern for how Ian and the Nau crew might be feeling. Failing, I asked instead what he thought the legacy might be of this bold experiment.
Here again the emotion enveloped Ian’s reply, but not with a sense of defeat. It sounded much more like a vigorous, robust hope. “We’ve all learnt a deeper sense of purpose. A purpose that will not end with Nau.” He continued, “We’ve gotten to know so many kindred spirits. The larger idea will continue. With a deep sense of urgency of what the planet needs.”
The Homage
I’ve long been a champion of Nau, because they’ve embodied all that has been important in my own working life. I was previously an outdoors instructor, then an outdoor apparel and gear designer, a lecturer in green textiles and in sustainable interior design, a manager with various not-for-profit environmental organisations and so on. Here was one company that had its finger in all those pies. It was trying to do it all. At the same time. And from scratch.
It was a big ask. (see below)
Once, as a rockclimbing instructor, I had students who began to surpass the grades I could comfortably climb. But they were improving beyond me for the very reason that they refused to settle for ‘comfortable’. They took risks, they put themselves on the line, and in doing so achieve higher standards that I would. Their phrase of the day was: “you’re not trying till you’re flying.” Shorthand for: you have to test yourself, push past your comfort zone before you’ll improve. And in the process you’ll probably fall off.
Nau sure tried. With great verve and passion. Maybe they reached a grade above what was possible for a eco start-up business. They’ve now fallen off. But boy, did they show what can be achieved if enterprises are prepared to give that bit more. They raised the bar, set new standards, and broke the mould. Clichés all. But nonetheless each true.
In short: they inspired.
It is with great sadness that we bid them farewell, and wish all that sailed on the good ship Nau safe passage to their next adventure.
And a personal 'thank you' to Ian Yolles for taking time out on a very difficult day to speak with us.
__________
NB: You may still be able to buy their quality product at 50% off from their online store and help them support their external business partners as they wind down.
The Ask:
• Apparel that adhered to the credo of ‘Beauty, Performance and Sustainability’
• Multipurpose apparel equally suited to weekend in the hills or a night on the town
• No external logos or branding on apparel
• Impressive tailored designs and construction detailing
• No paper catalogues
• LEED Gold standard offices and retail shops
• Purchase of Forest Stewardship Council certified timber for fittings
• Third Party verification of workers rights and conditions through Verite
• Restricted Substance List of materials not to be used in products
• Over 30 custom designed fabrics, using only recycled polyester, certified organic cotton, PLA corn, lambswool or merino wool
• Purchase of equivalent yield conventional corn to offset any GMO corn that might be in their PLA
• Use of high grade componentry like RiRi zips and Prym fasteners
• 5% of purchase price donated to customer-directed not-for-profit organisations
• Webfront retail stores promoting direct-from-warehouse-to-customer shipping
• Recycled content flat pack shipping bags, instead of space wasting boxes
• Carbon offsets for shipping and corporate travel
• Renewable energy certificates (wind and solar) for office and shops
• Acting as an agent for change through their blog
• Sponorship of environmentally and socially oriented online videos.
• Customer prizes and Flickr postings for photos of the clothing in action.
See our past coverage of Nau here:
• The first inkling.
• The In-depth Interview Part 1
• The In-depth Interview Part 2
• The first glimpse of the range
• The online store opens
• The conundrums
• Product review - the Asylum jacket
• Product review - Spring 08 line
• The No Logo concept
Follow @TreeHugger on Twitter & get our headlines with @TH_rss!
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Good grief, that didn't last long!
It's a shame that Nau only functioned nationally. The clothes and motivation are beautiful but the market had to be limited, even online you couldn't pay the postage to get clothes sent overseas.
No wonder they went out of business, even with the 50% off, they are still asking $50 for a scarf!
Also, the link you posted to the store is broken....
__________________
Writer's Note:
Ta, link is fixed.
Sure, but you also also buy a waterproof-breathable jacket for $75. It just depends on whether your glass is half full, or half empty.
Nau's closing is to do with operating capital, not poor sales.
This was not just a company...it was a community, a lifestyle and an influencer in people's lives. The outdoor apparel industry will never be the same...nor should it be. Thanks nau for doing what you did so gracefully. We will miss you!!!
From my perspective, their stuff was expensive even at 50% off, but I went to the store in the Beverly Center today I didn't even know had opened (it'd been there for 2 weeks) and walked out with some goodies.
Would've liked to see the stuff made in US at the same price point.
Guess it's back to Patagonia from now on?
I will truly miss this company and hope that the founders don't give up. I look forward to seeing its revival or its successor.
why they never made it? probably because myself and people like myself never knew it was a green brand until i read this post! look @ the store pictured above -just looks like another "gap" nothing about it says green so i would have walked right by.
if there sign said nau "an environmentally friendly store" or had some tell tail imagery...being subtle doesn't get you noticed
So where should we send the garments for recycling when they've outlived their useful life?
Kaylia, I still have my first fleece jacket. It's 27 years old and I wear it proudly every winter. Given the quality of Nau's product I seriously think it will be a good few years before you'll need to worry about recycling.
When the time does come, if it is still wearable, donate it to a thrift store for reuse. If you really want to 'recycle' it, by then Patagonia might be accepting other brands for their Common Threads program.
I also have to agree that the prices were pretty high--prohibitive for many of us. Even with the discount, I'm hard pressed to purchase something. I understand how they got that way, given the way that they produce their clothes. That said, green goods with such high prices gives fodder to those who argue that you can't be green without being wealthy. This is a notion that I personally completely disagree with, as so many aspects of being green that save money (ie, living in smaller housing than a McMansion, riding even the fanciest of bikes and using mass-commute options, reducing electricity use, etc etc)--but I can see how pricey green goods can overwhelm those who are not affluent as well as those who are not aware of cheaper ways to reduce one's impact. Finally, luxe green goods can also give those who can afford them the false sense that selective consumption will save the planet. That is to say, doesn't someone who lives in a small urban apartment and who takes public transportation have a lower carbon footprint than someone who lives in a 4,000 sq. ft. "green" house the 'burbs, and who uses their hybrid car to drive to to the woods to go hiking in their green outdoor apparel?
That's unfortuante. Hopefully their founders will come back with a new store at a lower price point.
An anthem for failed startups
http://www.last.fm/music/Steely+Dan/_/Everything+Must+Go
-----------
It's high time for a walk on the real side
Let's admit the bastards beat us
I move to dissolve the corporation
In a pool of margaritas
So let's switch off all the lights
And light up all the Luckies
Crankin' up the afterglow
'Cause we're goin' out of business
Everything must go
It's a real shame the investors got cold feet. First time I heard about Nau was actually today, through a friend. I went to their website, loved the stuff – and actually got a friend in US to order $200 worth of clothing for me. I'm really curious why they didn't ship outside US tho, their products would have been a huge success over here in Euroland.
btw, $85 dollars for a pair of jeans is not really much, scandinavian boutique brands are about twice that price....
I recall reading an article on Treehugger recently about Nau's "no logo" anti-branding approach. While I respect this credo, I wonder if somehow, this lack of branding affected the company's marketability. If we don't see ads for the company, don't have a store near us, and don't see people walking down the street with "NAU" in 1 foot letters on the back of their jackets, that only leaves word-of-mouth, which is barely viral enough to successfully market a national company.
I'm sure a lot of it is the drying up of investment capital, but I still wonder about the no-logo issue.
i live here in Oregon, and have watched NAU progress from a small idea, into a beautiful start up. i own a few of their pieces (purchased on sale of course), and will have these forever. i am saddened that they are closing, but i guarantee, if you make a purchase, you will not be dissapointed.
it is sad that so many tree-huggers are hung up on price.
quality costs money, time, and attention to the smallest details possible.
yet, you can just look at the price of a scarf and all the sudden 50 dollars is too cheap? Or 50 percent off make the price right? Do you have an inkling of what went into making that?
sad statement of our society I suppose, to constantly compare pricing set from unfair labor practices and conditions with fairly paid labor workers.
Perhaps the most ironic part is that NAU was most likely working on outdoor trade mark ups, which are much lower than box store mark ups. So that NAU jacket you just paid $200 for probably cost $65 (ratio of .32 cost of goods versus retail). A jacket bought at the GAP, similar design, etc. that you paid $85 for most likely has a cost of around $12 (ratio of .14 cost of goods versus retail).
You can easily see where the cost and benefit comes from. Personally, I'd rather pay more for higher quality materials and fair wages than give my eighty percent to the "ephemeral profit god" of any company.
until we get past these milestones, I can clearly understand why the fickle market struggles to accept new ideas, business models, or brands (that aren't trying to be GAP).
this is a shame, i was very excited about this company, and even dragged my gf to the store when i was finally near one "live on the east coast" finally got to one in seattle and learned they had lost investors. one con we both had was the fit of many of the clothes. i am 5'11" 180lbs hardly ab-normal, and it was a struggle to find something i was comfortable in. other than that i loved everything about this store. yes a bit pricey, but worth it for style, function, and peace of mind
Looks like their website is closed now too. Got some great 50% deals; b4 it went down. Guess they sold their remaining inventory by now. Got some great items during their existance.
___________
Writer's Note: Nau site was still up at time of approving this comment. And the online shop was still open.
This has come as a great shock to me...I've been talking non-stop about Nau and what a brilliant company it is, plugging them at the most visible sites I could including my own.
And it was because of their business model, the very talented people who ran Nau, as well as what they were offering in clothing....that made it all so wonderful.
If I had to guess why this has happened now at a time that the green movement is kicking in to mainstream it has all kinds of ironies attached to it, like they needed to have more available webfronts, they needed to have more diverse offerings, perhaps from other manufacturers. Plus they were attempting several things at one time, both the genius part and what may have ultimately been their downfall. Being a manufacturer and a retailer at the same time especially with such a specific focus is a lot to manage, but they were being very smart about it and not trying to grow it too quickly in order to manager their growth. But giants like Penny's and Wal-Mart were faster in being able to create green categories of clothing at less expensive pricing, even though the quality obviously wouldn't be the same......but that is where the investors no doubt got scared off and that I'd totally put onto this economic environment.
They need a Seventh Avenue backer or even an L.L. Bean to have them as a division. This is a period in history where the big guys are eating up the little guys because its just too difficult to survive; I trust either someone will come to the rescue or hire the team as consultants to put their own bohemouth companies in the category correctly. The catch on that is how their message reverberated thoughtout the brand. That's what made it so unique. You'll never be able to get a Penny's or a Wal-Mart to suddenly have this entirely unique experience to offer a market. Hope somebody smartens up quickly and gets them back up.
It will be interesting to see what happens.
Where's Richard Branson when we need him? Or perhaps Patagonia will but the talent - since Nau seemed to be doing everything that Patagonia wants to do, only better.
Or hell - how about Al Gore - he's got cash coming out his ears, surely he could invest in something like this!
Very sad day - it seems good guys really do come in last!
I've got some Nau stuff (thanks to reading about it on here) and it's really top notch. As for the price: It is NOT expensive - even at full price. Compare their jackets to comparable Gore-Tex XCR units from Mountain Hardware, Arc'Teryx, TNF, etc, and you'll find Nau's retail prices very competitive. It is high-end stuff - which costs money whether green or not...
Just how much cash do they need? Because I've seen many a business in this dilemma. If what everyone is saying is true, and both their product and their business model is effective there is an obvious answer:
GO PUBLIC! Please - c'mon now Nau management... If you've got the chops to put together such an incredible company - and clearly you do - then let the big venture capitalists run away, and go public to raise the funds!
It's about grassroots change - and I'm sure that many on here would be interesting in purchasing stock in Nau - I know I would.
PLEASE - reconsider the closing, take a deep breath, and take your company public! If you can't find the cash - let the cash find you!
Price was not an issue. It's never been an issue with all other "overpriced brands" like lulu lemon, ck, etc. I'm sad that nau has to close it's doors. They are one of my big inspirations for Ukunto. Well, nau was fore rider, and just like Apples Newton did not succeed, business with this type of structure will work in the future.
Let's all go over to nau.com and read up on what they did different and be inspired!
Hi Warren,
I was incredibly dissappointed to hear the news. I launched a similar (much smaller scale!) socially conscious apparel brand concept in 2006, üba (which merges fashion, art and philanthropy to engage consumers in peace and human rights issues - www.ubawear.com) and am now in discussions with potential funders to scale up the model.
I'd like to have a quick chat with Ian Y or someone else on the team at Nau - any guidence you can give in terms of how best to get in touch would be much appreciated.
You can reach me at rajesh @ ubawear.com
Thanks much,
Rajesh
it sucks for them & for the industry.
i can't help but think however that with rent like the Beverly Center is just not a "sustainable" business model. you have to plan these things as if the market will go down b/c it does.
i should know, i do the same thing and i have been in business for over 2 years.
it sucks for them & for the industry.
i can't help but think however that with rent like the Beverly Center is just not a "sustainable" business model. you have to plan these things as if the market will go down b/c it does.
i should know, i do the same thing and i have been in business for over 2 years.
Thats a shame, as the products were great. We tried to get some to sell online at www.todae.com.au but at that stage they were not able to supply us.
All the best for future ventures.
Danin