Fashioning a
green ideal
Portland clothing company Nau plans to build its future on
social responsibility.
By Oakley Brooks
In late 2004, the handful of people starting outdoor clothing
company Nau faced a tossup. Founder Eric Reynolds, who started
the legendary Marmot outdoor brand, wanted the company located
in Boulder, Colo., where he lived. CEO Chris Van Dyke, a former
Nike exec, wanted it in his hometown of Portland. Van Dyke won
out because he stood firm on two things: He wasn’t moving
to Boulder, and as he puts it, “this is an Oregon
company.”
Nau (pronounced “now”) is a bold venture looking
to set a new standard for corporate citizenship in the
high-profile apparel industry — an effort so concerted
that even the Nau clothing color palette is chosen for
longevity to prevent wastefulness. For that, “this is a
better place,” Van Dyke says, sitting in Nau’s
headquarters in Portland’s Pearl District.
“There’s a thoughtfulness here. And as a brand,
being from Oregon is a huge plus.” Indeed, the
company’s image and the look of its clothing seems
to be springing from the sophisticated-yet-outdoorsy culture
that has come to define Portland. (It also hasn’t hurt
that there’s plenty of creative apparel minds around
town.) “The identity of the place is really something to
be celebrated,” says Ian Yolles, Nau’s vice
president of marketing.
As Nau prepares for an online launch this month of its gear
(stores in Portland and three other cities will open later this
spring), it also faces a common challenge with Oregon: trying
to communicate and maintain its competitive edge in a global
marketplace increasingly awash in ideas of environmental
sustainability and corporate responsibility.
Nau has built the company with one of the greenest foundations
anywhere. Its products will be made of ecologically benign
materials, its compact stores and Web-reliant sales model are
designed to cut energy use, and its giving program is
exceedingly generous from the get-go. Nau’s plan and its
all-star cast of execs — with loads of experience at
Nike, Patagonia and other brands — have piqued the
interest of investors who’ve contributed $24 million in
venture capital so far.
But whether or not it reaches its five-year goal of 150 stores
and $250 million in sales will depend on how well it
communicates its eco-edge to the marketplace. There already is
at least one established brand — Patagonia — with
impeccable green credentials, and several of the biggies,
including Nike and Adidas, are putting significant resources
behind green products. For the same reason that Nau’s
timing is good — many consumers are looking for corporate
integrity — the startup also is likely to see pressure
from competing brands that have far more cash and marketing
muscle to compete with Nau for the same conscious
customers.
“Globally, sustainability is hot right now,” says
Peter Kim, senior analyst with Forrester Research in Cambridge,
Mass., and a former Puma marketing executive. “The guys
and gals at Nau will have to continue to keep an eye on their
competitive advantage.”
GREEN PIECE
Retail Price:
Roundhouse dress, $135
Colors: Charcoal
and chocolate
Materials: 88%
recycled polyester, 12% mechanical stretch polyester,
treated with water repellent finish to keep the rain
off.
Sustainability
score: High – Nau has used a majority of
recycled materials, although the water repellent coating
derives from a chemical in the toxic PFC family.
Fabric from:
Japan
Dress made in:
Thailand
Marketing
pitch: “ You can wear it to hike through
the rainforest to town, wipe the mud off the hem while
cooling your calves in the river, get your visa extended at
the embassy, then celebrate at the best restaurant you can
find.”
|
IF A STARTUP’S FUTURE SUCCESS were based solely on a
management team’s experience, Nau would seem headed for
the stratosphere. Soon after Reynolds (who’s since left
Nau) talked to Van Dyke about the company idea in mid-2004, Van
Dyke assembled a seasoned group of eight interested folks drawn
from his days as a top marketing executive at Nike and
Patagonia.
Among them was Yolles, who also directed marketing at Nike and
Patagonia; Mark Galbraith, who was instrumental in the
development of Polartec fleece at Malden Mills before designing
products at Lowe USA and Patagonia; and Jil Zilligen, who ran
Patagonia’s 1% for the Planet corporate philanthropy
program and eventually spun it off as a separate nonprofit.
“We were sitting around my living room saying ‘If
you do it, I’ll do it,’” Van Dyke says. He
later recruited Steven Gomez, former Nike global brand
president, as Nau’s board chair. In addition to facing
the unknowns of a startup, they were wrestling with conflicting
realities: The world didn’t need another clothing
company, but the clothing world did need some serious reform.
In the end, Van Dyke says, they decided only a company built
from scratch could drive that reform.
“There’s this new activism going on — that
in business and technology, we are going to find the solutions
to today’s problems,” says Van Dyke, who ran a
sustainability consulting company with Zilligen before jumping
to Nau. “Instead of chaining yourself to a tree,
I’d like us to find a business reason to not cut it
down.”
A key element of the Nau business model is the eco-credentials
of its clothing line. The company developed 30 new materials
with suppliers including polylactic acid, a corn-based compound
that will substitute for nylon and polyester, two
petroleum-based clothing staples that didn’t meet
Galbraith’s no-new-oil standard for Nau materials. The
company also worked with garment industry collective Organic
Exchange to source organic cotton with longer fiber lengths to
allow use in higher-end clothing.
“We had a lot of personal relationships with suppliers
to draw on and they’ve been willing to assume some risk
with new materials,” says Zilligen. (Nau has also
promised to have its contract factories across Asia and around
the world audited by third parties.) “Some suppliers also
recognize there’s a wider market out there for these
goods.”
In the company’s 2,000-square-foot
“webfront” stores, to be built to LEED building
standards, customers will be asked to size up and try on the
company’s sleek hybrid line of outdoor and casual wear.
Nau will offer a 10% discount if customers use computer
terminals in the store or at home to purchase the item and have
it sent from a Portland warehouse to the customer’s home.
Bypassing independent retailers and selling directly to
consumers improves Nau’s sales margins significantly over
traditional wholesale clothing brands. Central distribution and
Web sales also allow Nau to save the energy and transportation
costs associated with constantly stocking stores with new
inventory. But Van Dyke admits a lot of uncertainty about how
customers will take to the new process and says the first
stores will carry extra inventory to accommodate traditional
buying habits. “After a year, we think 30% of people will
take the discount and buy online but I’m not even
convinced of that. We’ll see.”
After each purchase, customers will be asked to direct a cash
gift by the company — 5% of their purchase price —
to one of 12 local and nonprofits. The “crown
jewel” of the Nau corporate responsibility plan, as Van
Dyke coins it, would put the company in the top 50 of corporate
givers worldwide if it hits its sales goals in five years.
NAU’S MARKETING TEAM ALSO SPENT SIGNIFICANT ENERGY THIS
FALL projecting an unvarnished yet lofty image of the company
on its website. Employees and friends mix blog entries and
short movies about hip-hop dance classes and river-wave surfing
with discussions about individual and corporate sustainability.
Nau’s home city is also a recurring theme on the
blog’s “Reasons to Love Portland” series.
The whole effort is a very deliberate attempt to establish the
company’s authenticity before anything goes up for sale
on the site. Company officials say they also plan to keep a
forum for ideas free of sales promotions after the new line
launches.
“It’s really important that we establish a
conversation that’s based on ideas and a relationship
with people that’s not about the product,” says Hal
Arneson, Nau’s creative services director, who produced
Patagonia’s catalog for two decades. “We dislike
people who use their blog to push their shit.”
That authenticity may prove to be Nau’s biggest
differentiator, especially since several analysts agree that
it’s only a matter of time before other companies
incorporate some of Nau’s new materials and elements of
its sales and distribution model. (Nike already has its green
Considered line on the market.) Indeed, in the spirit of
corporate responsibility, Nau has told suppliers to share the
new clothing materials with competing brands and has offered up
royalty-free the software driving its corporate giving
program.
“The challenge is there’s a lot of clamor out
there,” says Michael Hodgson, president of SNews, a
specialty retail industry newsletter. “Nau has a new
retail package — it’s outdoor oriented but very
urban influenced. The question is can they convey their message
to the point that enough customers hear it?”
Hodgson, a longtime outdoor apparel industry observer, says
Nau is making all the right moves to establish an authentic
brand so far — including sharing its materials with other
brands. “If anybody can pull this off,” he says,
“it’s this group.”
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