With its stock trading at around 61 cents per share, Eddie Bauer Holdings Inc. (NASDAQ: EBHI) is going back to its roots by: introducing a new line of high-performance outdoor gear, and scaling back on the casual apparel that has been getting crushed by weak consumer spending and competition.
In a press release, Eddie Bauer said that "In a bold return to its heritage, Eddie Bauer has joined up with a dream team of mountaineers to build a new line of outerwear and gear called First Ascent. First Ascent combines Eddie Bauer's legacy as the original expedition outfitter with the expertise of some of today's most renowned mountain guides and climbers, including Peter Whittaker, Ed Viesturs, and Dave Hahn."
First Ascent will be sold at "stores within stores" at Eddie Bauer locations nationwide. Returning the brand to its roots and to the products that it built its reputation on seems like a good idea, especially when the more recent "blah" strategy hasn't been successful.
The problem for Eddie Bauer may be that it's too late: Years of eight- and nine-digit losses have hurt the company's balance sheet and the company currently has a negative tangible book value. With better-financed competitors like EMS, Eddie Bauer may have a hard time breaking through.
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Comfort Zone Investing: Buffett buys Burlington
Reader Comments (Page 1 of 1)
3-05-2009 @ 10:04AM
Gary Ambrosino said...
EMS and REI, two potential competitors have weak design teams and lack state of the art materials for their clothing. North Face Summit Series is OK but it's not where they concentrate and probably not a priority compared to the core of their line which is 'campuswear' outdoor gear. Mountain Hardwear has suffered from it's acquisition by Columbia and has poor sizing and even worse distribution. Patagonia is passe' and Ark'teryx is way overpriced. European brands like Mammut and Millet are good but these companies haven't had much luck with distribution in the U.S. There's a HUGE opportunity for Eddie Bauer to establish a premium brand line presence and if they hit the price points right they have a real opportunity. Watch for their dream team to summit Everest and watch for one of their members to be the first U.S. woman to do it without supplemental oxygen. This will make press. I think if this works, they'll ditch the rest of the lines, concentrate on high end stuff that's profitable, and look for an acquirer.
3-05-2009 @ 11:03AM
G. Roberts said...
I really do not think EB needs to reinvent thenselves. Their clothes are pretty well made and comfortable. To add another line can't hurt them but I don't see the point unless it is a speciality line. I hope it does not change to much. Most of my clothing is from EB and it would not be a happy time for me if they start marketing only hunting, hiking and camping stuff.