Nau, the ambitious Portland-based outdoor retailer, announced Friday it was closing just 14 months after launching. In a statement on its website, the sustainable apparel company blamed tight credit markets.
Nau was founded in 2005 with a management team and board formerly hailing from big-time apparel companies including Marmot, Nike, Patagonia and Adidas. The company aimed to design and sell clothing made from renewable materials, such as recycled polyester and merino wool. At the store level, displays were made from reclaimed wood and dressing rooms with curtains made from recycled material. Getting the most media attention was Nau's plans to give 5% of sales to consumer-selected charities.
Another unique feature was that Nau kept minimum inventory in its stores, meaning customers often had to have their product shipped to them from a distribution facility, albeit at a 10% discount. Nau planned to open 140 stores by 2010.
But according to The Oregonian, it took $35 million of capital to get through its first year of sales. As it struggled to find new investors, it cut back its planned number of store openings this year from 20 to five. Its stores are located in Chicago; Portland, OR; Bellevue, WA; Boulder, CO; and L.A.
In a statement on its website entitled “Goodbye for Nau,” the company said, “In the currently highly-risk averse capital markets, we simply could not raise the necessary funds to continue to move forward. We believe this not so much a reflection of the viability of our business, but the results of an unfortunate confluence of events. Just as we could not have predicted the sudden groundswell of environmental consciousness that blossomed at the time we launched our business, we did not foresee the current crisis in the capital markets.”
Nau went on to thank its investors “who got us this far those who saw our potential and gave their support when the risk was greatest.” It also thanked its customers, the media and other business associates.
According to the Oregonian report, some of those investors and others that watch the company, feel the issue was less about a tight credit market and more about the management of a business that burned through $35 million in cash in a little over a year that was at the root of the shutdown.
