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Outside Magazine, February 2007
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1 2 3 4 5 6 

Out There
And Nau for Something Completely Different (cont.)

NIKE HAS LANCE ARMSTRONG. Mountain Hardwear has Ed Viesturs. Nau has Dee Williams, a 44-year-old face in the crowd from Olympia, Washington, who sold her house and built a tiny, charming bungalow on wheels that fits in a friend's yard. A five-minute video on nau.com profiles Williams's commitment to making a smaller planetary footprint. She also happens to be attractive and toned (she rock-climbs), making her a perfect emblem of Nau's desired demographic: someone who's artistic and/or athletic and/or hyperconscious of humankind's effect on the earth. The company's Web site, which also features a Nau blog, is where Nau portrays itself as not just a business but a concept. "We're trying to celebrate the notion of positive change," says Yolles.

But in an era when the Bill & Melinda Gates Foundation has $30 billion to spend on charity and there's a wind-powered Wal-Mart, how unique is Nau's message?

"Honestly, I don't know if Timberland's social agenda helps them get customers," says Jim Duffy, an investment-bank vice president who watches sports and lifestyle companies for Thomas Weisel Partners. "I got on Nau's Web site. I was bored."

Nau's unique retail stores won't leave shoppers yawning. Walk in and you'll find a minimalist boutique where REI meets Armani meets the Enterprise: toxin-free fiberboard shelving, uncluttered displays, and four 19-inch computer touchscreens.

Two of those screens are dedicated to product information. The other two, at the back of each store, offer details on the 12 nonprofits (both national and regional) that each Nau retailer features as benefactors of the company's largesse: charitable organizations like Mercy Corps and the Oregon Natural Desert Association that address either humanitarian or environmental issues. The groups were selected from an original field of approximately 225 candidates, in part by Jil Zilligen, former vice president of environmental initiatives at Patagonia. Should the company ultimately reach its projected sales goals, Zilligen will oversee the giveaway of $13 million annually. By comparison, Patagonia and REI each donate $2.5 to $4 million per year.

Customers making a Nau purchase will be asked if they want to walk out of the store with their new clothing or enjoy a 10 percent savings by having the garment shipped free to their front door. The latter idea, Van Dyke believes, feeds American consumers' growing habit of visiting retailers to size up merchandise and then going online to buy it at the best possible price.

But there's also a fiscal upside for Nau: Retailer-based online sales mean the company can stock its stores with less inventory, which means the stores can be small (approximately 2,000 square feet), require fewer employees, and consume less energy. Van Dyke estimates that so many Nau customers will ultimately shop this way—30 percent—that Nau's stores are known internally as "Webfronts."

Sounds ingenious, but last summer's plans to build a prototype Webfront in a Portland warehouse and test it on consumers were scotched because the company didn't have the bandwidth to execute it. In the larger outdoor industry, opinions about the concept range from dubious to bitter.

"My money is on Chris, but he's going to have a million and one problems," says Perry Klebahn, the CEO of messenger-bag company Timbuk2 and a former colleague of Van Dyke's at Patagonia. "The square footage is too small. Consumers expect to take products home."

"It's definitely a stick in the eye of the retailers," says Rich Hill, an 18-year outdoor-industry veteran and currently the president of Ibex clothing. "Nau is saying it doesn't need them to create a brand."

If that's not enough tension, Nau has struggled to win over landlords leery of renting to a startup with an unusual business model. By early last fall, Nau was months behind on its leasing schedule, without a single signed deal on the four stores it hoped to open in 2007. Making matters worse was the far-from-unanimous decision to open stores in malls. Such venues don't seem like places where Dee Williams would shop. "Our designers were going crazy," says Van Dyke. "'We're in a mall! Jesus!' But if we take a flier on some emerging street location and don't generate enough revenue? We're fucked."

Before leaving Nau's offices last September, I sat in on a pitch given by Van Dyke, Yolles, Galbraith, and other Nau senior staffers to Jeff Dodd, who oversees leasing for Fashion Island, a successful mall in Southern California's Newport Beach.

Van Dyke was compelling, and Galbraith showed off beautiful clothes. But Dodd left poker-faced. He wanted another real estate manager to serve as Nau's guinea pig.

"I hope they have fantastic success," Dodd told me later. "If so, it would be great to have them down here."




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