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Eddie Bauer, Inc.

Eddie Bauer, Inc.

Post Office Box 97000
Redmond, Washington 98073-9700
U.S.A.
Telephone: (425) 882-6100
Fax: (425) 882-6127
Web site: http://www.eddiebauer.com

Wholly Owned Subsidiary of Spiegel, Inc.
Incorporated:
1968
Employees: 10,000
Sales: $1.79 billion (1999)
NAIC: 442299 All Other Home Furnishings Stores; 454110 Electronic Shopping and Mail-Order Houses; 448140 Family Clothing Stores

Eddie Bauer, Inc. is a catalog, storefront, and e-commerce retailer through two concepts: Eddie Bauer Sportswear, which offers outdoor apparel, sportswear, and accessories; and Eddie Bauer Home, which features bedding, home furnishings, and decor. The company mails out 110 million catalogs per year, with about a quarter of revenues stemming from catalog and web site orders. On the storefront side, there are 430 Eddie Bauer sportswear stores in North America and 38 Eddie Bauer Home units in the United States. To clear excess merchandise, the company runs an additional 52 Eddie Bauer Outlet stores in the United States, as well as the eddiebaueroutlet.com web site. The company is a wholly owned subsidiary of catalog retailer Spiegel, Inc., which in turn is controlled by Germanys Otto family, majority owners and operators of Otto Versand GmbH & Co., the worlds largest mail-order firm. Through joint ventures with units of Otto Versand, Eddie Bauer operates retail outlets and distributes catalogs in Japan and Germany and has a cataloging only venture in the United Kingdom. The company also licenses the Eddie Bauer brand to several other companies, including Ford Motor Company, which has made Eddie Bauer edition sport-utility vehicles since 1984; the Lane Company, for a line of Eddie Bauer furniture; and Cosco, Inc., which sells Eddie Bauer car seats.

Early History

Created by the son of Russian immigrants, Eddie Bauer, Inc. began as a tennis racquet stringing business in Seattle, Washington. While his parents would eventually play a significant role in the development of Eddie Bauer, Inc., Eddie Bauer initially drew upon his childhood years on Orcas Island, a sparsely populated island near Seattle, as the inspiration for what eventually would become a billion-dollar retail business.

Those early years were spent fishing, hunting, and trapping on the wooded island, imbuing Bauer with a love of the outdoors. When his family moved to Seattle in 1912, Bauer was 13 years old and looking for work. He immediately gravitated toward the only full-line sporting goods store in the city, Piper & Taft, and landed a job as a stock boy. Over the years, Bauer watched and learned, eventually becoming adept at making guns, fly rods, and golf clubs. In addition to these talents, Bauer also developed considerable skill in stringing tennis racquets, winning the world speed championship, while in a display window at Piper & Taft, by stringing 12 racquets in slightly more than three and a half hours. Still in his teens, Bauer already had gained the attention of Seattles sporting community. He often was referred to in local news-papers for killing the biggest elk, or catching the most fish, or for winning rifle- and pistol-shooting competitions. This local recognition would serve Bauer well when, in 1919, with $25 in his pocket and $500 borrowed on a 120-day loan, he rented 15 feet of wall space in a gun shop for $15 a month and began stringing racquets on his own. In this venture, Bauer enjoyed immediate success, stringing enough racquets to accumulate $10,000 within his first year. Encouraged by his initial success, Bauer arranged for credit from a bank and opened his own shop, Eddie Bauers Sport Shop, in 1920, the predecessor of Eddie Bauer, Inc.

In addition to his renowned racquet-stringing abilities, Bauer also offered golf equipment and trout fishing flies during his first year of business, and the 20-foot storefront quickly became a haven for sporting enthusiasts throughout the Pacific Northwest. Bauers success during these nascent years was in large part due to his reputation as an experienced outdoorsman and his active participation in the sporting community. He worked at his store from February through August each year, then hunted and fished throughout the winter. During these sojourns in the wild, he field tested all of the equipment he sold in his stores, which, after the first year, included an array of outdoor equipment and clothing. Two years after he opened for business, this firsthand knowledge of his stock enabled him to offer an unconditional guarantee of satisfaction on all of the products sold in his store, a rarity for retail businesses during the 1920s; he also established a company creed. Bauer promoted sporting activities in his spare time, increasing the publics awareness of such sports as skiing by importing Norwegian hickory skis and persuading Norwegian skiers to come to the Pacific Northwest to help foster growth in the sport.

By 1924, Bauer had added a complete selection of fishing tackle, firearms, and skeet and trap equipment to his store and renamed it Eddie Bauers Sporting Goods. Customers continued to flock to Bauers store, lured by his unconditional guarantee and his knowledge of the outdoors. Eddie Bauers Sporting Goods had quickly become a favorite place for outdoorsmen to outfit themselves for a wide variety of sporting endeavors. With a large and loyal clientele, Bauers future success appeared as guaranteed as the products he sold, but, in the coming years, Bauers position as a successful operator of a local sporting goods store would be elevated to a height not imagined even during the optimistic 1920s.

1930s: From Shuttlecocks to Goose Down Jackets

Bauers success had been predicated on his experience and interest in sporting equipment, so it was fitting that the innovation that would eventually launch his company into the upper echelon of the outdoor apparel industry came as a result, at least in part, of his desire to improve sporting equipment. In the late 1920s, Bauer attempted to improve the consistency of flight in badminton shuttlecocks. He imported premium feathers from Europe and developed a method utilizing buckshot that achieved the desired results. In 1934, his design was patented and eventually adopted for use in the badminton world championships.

While investigating which type of feather would improve the flight of shuttlecocks, Bauer came across goose down, reminding him of an uncle who had once extolled the virtues of goose downs insulating quality. Years earlier, Bauers uncle, a Cossack fighting in Manchuria during the Russo-Japanese war, had worn a coat lined with goose down to stave off the 50 degrees below zero winter weather. Bauer, who had. suffered through many cold winters fishing and hunting in the mountains near Seattle, decided to use goose down to make a coat for himself. After designing and sewing a quilted goose down jacket for himself, Bauer discovered the truth of his uncles story and soon was making down jackets for a few of his friends. The popularity of these jackets led Bauer to patent his design and begin production of Americas first quilted, goose down insulated jacket in 1936. Called the Skyliner and selling for $34.50, the jacket was an immediate success, particularly with Alaska bush pilots, and led to the production of a wide assortment of garments with different quilting styles. Starting with ten seamstresses in 1936, Bauer needed 125 by 1940 to meet the voracious demand for his quilted jackets. By this time, Bauer had secured a virtual monopoly on the insulated jacket market, employing as many seamstresses as his rapidly expanding business required and purchasing all the European and North American goose down he wanted.

World War II Contributions

This supply of goose down, however, ended just as Bauers quilted down garments began to attract orders through the mail. When the United States entered World War II in 1941, the war production board requisitioned all of the goose down supply on the market and froze Bauers existing supply. No longer able to purchase or use goose down, he was relegated to using eiderdown as a replacement, a substitution that negatively affected his sales. It appeared as if his flourishing retail trade had been swept away from him, but whatever losses Bauer incurred as a result of the governments seizure, he more than made up for them by providing goose down products to the U.S. Army Air Corps, beginning in 1942. At first, Bauer provided the military with sleeping bags and snowshoes and binders, which he sold at retail prices, and eventually his business with the government increased considerably. Using the war production boards goose down, Bauer manufactured 25,000 flight suits and nearly 250,000 sleeping bags for Air Corps flight crews and those fighting in the frigid Aleutian campaign. To satisfy the militarys needs, Bauer constructed a production factory, invested roughly $200,000 in specially built machinery, and hired 400 power sewing machine operators to work in three shifts, seven days a week. This prodigious wartime production salvaged what otherwise could have been a recessive period for Bauers company and, more importantly, it also carried the Eddie Bauer name across the nation. All of the garments Bauer manufactured for the military had the Eddie Bauer label stitched on them, the only garments during the war that carried the manufacturers private label.

Although Bauers civilian business slackened during the war, he continued to advertise to create a demand for his products when the war ended. Once it did, he steeled himself for an immediate return to the prosperous days of the late 1930s. Expectations now ran higher, however, considering the tremendous strides in name recognition the company had made as a result of the war, so Bauer introduced a new way to bring his products to the public. In 1945, just as many of those who had worn Eddie Bauer products during the war were returning home, Bauer issued the companys first mail-order catalogs, through a division that had been formed in 1942 to sell the goose down products, Eddie Bauer Expedition Outfitters. Although the introduction of the catalogs represented a significant landmark in the companys history, a more pressing concern during these immediate postwar years overshadowed their im-port. Bauers company seemed in danger of failing.

Company Perspectives

Our Creed: To give you such outstanding quality, value, service and guarantee that we may be worthy of your high esteem. Eddie Bauer, 1920

1950s Through Mid-1960s: Concentrating on Mail-Order Cataloging

To fill the demands of his contract with the Air Corps, Bauer had invested in equipment that could serve only his production needs during the war. Both the profits and the machinery were temporary, so, once the war ended, Bauer was left with the machinery and nowhere to sell it, leaving him in a precarious situation. As he would later recall, We were stuck with the machinery and I lost practically everything I owned, down to where I had to start all over again. To assist with this rebuilding process, Bauer entered into a partnership in 1953 with William F. Niemi, Sr., a friend with whom Bauer hunted and fished, and together they strengthened the company by placing an emphasis on the mail-order side of the business and concentrating on producing a larger selection of products (the company was now officially called William F. Niemi Co. but was doing business as Eddie Bauer Expedition Outfitters). From this point forward, until the 1970s, Bauers company would be primarily a mail-order business. Before the end of the decade, Bauer would close his stores in Seattle and rely almost exclusively on purchases made through the mail, with the only retail sales being generated by a factory store in Seattle. In the late 1950s Bauer and Niemi also brought their sons into the partnership.

The changes made by Bauer and Niemi worked. By mailing catalogs to potential customers and outfitting those outdoorsmen who came to the factory in Seattle, the company generated $1 million in sales in 1960. Although Bauers financial position had seemed bleak 15 years earlier, the widespread recognition of the Eddie Bauer name had always remained secure. Now a new generation of potential customers were being introduced to the Eddie Bauer line of products through the catalogs arriving in the mail. By this time, Bauers company used nearly half of the worlds supply of northern goose down and had outfitted every American expedition to the Himalayas over the previous ten years. When mountain climbers needed to train for assaults on the towering peaks in the Himalayan range, they often selected the mountains in proximity to Seattle as suitable sites. By the 1960s, a visit to Bauers factory store became a natural stop for climbers needing clothing and equipment, which further bolstered the nations recognition of the Eddie Bauer name. When James W. Whittaker became the first American to reach the top of Mount Everest in 1963, he wore an Eddie Bauer parka, slept in an Eddie Bauer sleeping bag, and used Eddie Bauer gear, as did the entire expedition. Three years later, Bauers company outfitted the American Antarctic Mountaineering Expedition, and it continued to produce the preferred gear for expeditions to follow in later years.

196871: Brief Stab at Independent Expansion

By 1968, annual sales at the company were approaching $5 million and professional management and financial planning was clearly needed at the rapidly growing firm. Eddie Bauer and his son decided to sell their half of the company to Niemi and his son, Bill Niemi, Jr., for $1.5 million; a group of investors who had helped finance the buyout gained stock in the company, which was incorporated as Eddie Bauer, Inc. The completion of the sale in June 1968 marked Eddie Bauers retirement from the firm he had launched nearly 50 years earlier.

The new management team, headed by Niemi as chairman and Niemi, Jr., as president, made some initial moves back into retailing, opening the first store outside Seattle, in San Francisco, in 1968, and a new store in downtown Seattle, the companys first large store, in early 1970. The company also consolidated its scattered Seattle operations in a building on Airport Way in South Seattle that included administration, customer service, manufac-turing, warehousing, and distribution at one location. By 1970 sales had surged to $9.1 million, with earnings exceeding $500,000. Needing capital to fund a more ambitious expansion, Eddie Bauer, Inc. made plans for a public offering in the spring of 1970, but the underwriter of the IPO recommended a postponement following a stock market dip. It was at this point that the management concluded that the best course of action would be a sale of the undercapitalized company.

197188: The General Mills Era

In March 1971 food conglomerate General Mills, Inc. purchased Eddie Bauer for about 311,000 shares of General Mills common stock, or about $10 million. The acquisition of Eddie Bauer was part of General Mills aggressive move into specialty retailing. What General Mills received was still essentially a mail-order business, with a small retail side. It was the latter segment of Eddie Bauer that General Mills wanted to fortify.

Key Dates

1920:
Eddie Bauer opens Eddie Bauers Sport Shop in Seattle.
1922:
Bauer begins offering his customers an unconditional guarantee of satisfaction.
1924:
Store is renamed Eddie Bauers Sporting Goods.
1936:
Bauer patents and introduces the first goose down insulated jacket, marking the companys entrance into outdoor apparel.
1942:
Bauer begins providing goose down products to the U.S. Army Air Corps.
1945:
Company sends out its first mail-order catalogs.
1953:
Company is reorganized as a 50-50 partnership between Eddie Bauer and William F. Niemi, Sr., under the name William F. Niemi Co., doing business as Eddie Bauer Expedition Outfitters.
1968:
Bauer retires, selling his interest in the company to Niemi; the company is incorporated as Eddie Bauer, Inc.
1971:
General Mills, Inc. acquires Eddie Bauer for $10 million.
1984:
Through a licensing deal with Ford, the first Eddie Bauer edition SUV makes its debut.
1988:
Spiegel, Inc. acquires the company for $260 million.
1991:
Eddie Bauer Home makes its debut.
1993:
Company enters into joint venture to open stores and start catalog operations in Japan.
1995:
Joint venture is created to form retailing and cataloging operations in Germany.
1996:
Company moves into e-commerce with the launch of eddiebauer.com.
2000:
With expansion into Hawaii, there are now Eddie Bauer stores in all 50 states.

Several years passed, however, before the disparate merchandising philosophies of the two companies would effectively join together and even longer until Eddie Bauer obtained consistent leadership. From 1975 to 1978 the company went through four presidents, until finally settling on James J. Casey, who had joined Eddie Bauer three years earlier. At this time, the state of Eddie Bauers product line was still in flux, as General Mills attempted to reshape its subsidiarys market appeal. Six months after Casey assumed leadership of the company, he maneuvered it away from a merchandising failure that had added golf and tennis apparel to the companys product line. For customers inured to a product line whose reputation had been built on manufacturing down parkas and outfitting expeditions to the Antarctic, the shift was a difficult one to make, and potential customers went elsewhere when purchasing items for warmer climes. Although General Mills continued to struggle with the specialty outdoor market niche, it had increased the number of Eddie Bauer retail locations. By the end of the decade, there were 16 retail stores and plans in place to double that figure. In General Mills first year of ownership, Eddie Bauer posted $11 million in sales, and, with the boost in sales provided by the additional stores, sales climbed to $80 million, ranking the company second only to L.L. Bean, Inc. in the specialty outdoor market. The disparity between retail and catalog sales disappeared, with half of the total revenues generated by the stores, and 14 million catalog customers accounting for the remainder. In the meantime, the company moved its head-quarters once again in 1973, settling into a 14-acre campus in Redmond, Washington.

By 1984, the changes initiated by General Mills had substantially altered the image Eddie Bauer projected to its customers. Apparel now generated approximately 70 percent of the retail store revenues, and much of it did not resemble the clothing worn by members of a Mount Everest expedition, or even the clothing worn by weekend adventurers camping in the woods. Tents, backpacks, and fishing rods had slowly begun to disappear from the shelves of the companys stores and were replaced with oxford cloth shirts, lambs wool sweaters, and other items un-characteristic of the rugged, expedition outfitter. With 41 stores located in Canada and the United States, the company broadened its appealenough for Ford Motor Company to begin production of the Eddie Bauer Bronco II in 1984and attracted a more diverse clientele. The expansion of the retail side of the business represented a move toward greater growth for the mail-order segment as well. In 1983, Eddie Bauer mailed 14 million catalogs, and, by the following year, 30 million catalogs were sent to potential customers, two million of which were printed in French to accommodate the companys burgeoning clientele in Canada. Plans called for further expansion of the companys retail business, some 60 stores over the next five years. To lead the company toward this goal, a switch in leadership was made. In 1984, Michael Rayden replaced Casey and began separating retail, mail-order, and manufacturing into three distinct divisions.

By 1988, Eddie Bauer had 57 retail stores located in the United States and Canada. But just as General Mills was announcing further plans to augment Eddie Bauers retail holdings, the corporation put Eddie Bauer up for sale along with another specialty clothing chain it owned, Talbots, in a bid to divest itself of all nonfood-related businesses.

1988 into the 21st Century: The Spiegel Era

In 1988 Spiegel, Inc., a catalog marketer of apparel, home furnishings, and other merchandise, bought Eddie Bauer for $260 million, roughly equal to the sales the company generated at the time of its purchase. Wayne Badovinus was selected to lead Eddie Bauer and, over the next two years, 100 stores were added to the retail chain, bringing total sales up to $448 million. In 1991, Eddie Bauers first Premier store was opened in Chicago, which housed all of the companys recently introduced specialty product lines. All Week Long, Eddie Bauers collection of womens sportswear and casual attire, first introduced as a catalog business in 1987, had evolved into a retail business by 1991 with the opening of its first store in Portland, Oregon, and now was part of the Premier store concept. Also included in the Premier stores were The Sport Shop at Eddie Bauer, featuring custom-built fishing rods, reels, and fishing flies, and The Eddie Bauer Home Collection, which sold a wide assortment of indoor and outdoor furnishings. The addition of these specialty retail concepts, each first introduced in 1991, marked another dramatic leap in revenues. In the three years since Spiegel had purchased Eddie Bauer, the parent company had witnessed an increase in revenues from roughly $260 million, to nearly $750 million, occasioned primarily by the dramatic increase in Eddie Bauers retail business. This expansion continued after 1991, giving the company 265 retail stores by the end of 1992. Eddie Bauer Home became the longest lasting of the new concepts, and by 1994 there were 15 such outlets in 11 states, and the company was mailing out separate Home catalogs six times per year. Revenues surpassed the $1 billion mark for the first time in 1993.

The mid-1990s were marked by continued expansion in North America as well as the companys first forays into over-seas territory. The international expansion was pursued through joint ventures with units of Otto Versand (GmbH & Co.), a German mail-order giant controlled by the Otto family, which also controlled Spiegel. In 1993 Eddie Bauer entered into a venture with Otto-Sumisho, Inc. to open retail stores and sell through catalogs in Japan. Two years later the company joined with Otto Versand units Heinrich Heine GmbH and SportScheck GmbH in another venture created to launch retail and catalog sales in Germany. By the end of the decade there were 35 Eddie Bauer stores in Japan and nine in Germany. A similar venture for the U.K. market was created in 1996 but was discontinued three years later, with catalog sales continuing through Eddie Bauers German joint venture.

During 1995, when the company celebrated its 75th anniversary, Eddie Bauer launched a new retail and catalog concept, called AKA Eddie Bauer, selling upscale dress clothing for men and womena new line aimed at the burgeoning market for more casual work clothes. The companys All Week Long concept was discontinued, with those stores converted into AKA Eddie Bauer units. Even amidst a slump in the entire retailing industry, Eddie Bauer continued to expand in other ways as well. In 1996 came the debut of the EBTEK line of high performance outerwear and casual activewear featuring such fabrics as Goretex and Polartec 200. That same year, the company established a third distribution channel with the launching of its Internet web site. Bucking the early trend in e-commerce, eddiebauer.com was generating a profit within two years of its debut. During 1997 Eddie Bauer opened its 500th U.S. store.

With its Ford partnership continuing, Eddie Bauer entered into several more licensing deals in the late 1990s to further leverage its increasingly well-known name. In 1997 the company inked a deal with the Lane Company for the development of a line of Eddie Bauer furniture. The following year Eddie Bauer mountain bikes were launched with Giant Bicycle, Inc.; Eddie Bauer eye wear debuted through an agreement with Sig-nature Eyewear, Inc.; and Eddie Bauer infant and juvenile car seats were introduced in conjunction with Cosco, Inc.

After adding a net 39 stores in 1998, and suffering from declining sales because of increased competition and a slow reaction to hot new fashion trends such as cargo pants, Eddie Bauer reined in its North American expansion the following year, when the chains net gain was just nine stores. The company also made some alterations to its store concepts that year. Eddie Bauer Home was revamped to include less in the way of upholstered furniture and tabletop items and more of the domestic items for bed and bath, such as bedding and towels. The 40 home stores also began featuring the Eddie Bauer Juvenile line of bedding and beds and increased its baby by Eddie Bauer line of infant bedding and furniture. The AKA Eddie Bauer concept was discontinued in the form of separate stores, and the AKA merchandise was integrated into adjacent Eddie Bauer sportswear stores.

With a revamp of its sportswear lines, Eddie Bauer managed to post a six percent increase in comparable store sales in 1999, compared with a nine percent decrease the previous year. Overall revenues increased slightly that year, reaching $1.79 billion. During 2000, when Eddie Bauer planned to increase its North American retail units to 565 and to expand or remodel 40 existing stores, a milestone was reached when the first Eddie Bauer store opened in Hawaii, completing the chains entrance into all 50 states.

Since 1920, the Eddie Bauer name has evoked several im-ages. What once represented fishing tackle, guns, and mountaineering equipment now, in the early 21st century, stood for durable, comfortable apparel As Eddie Bauer planned for the future, supported by its multiple channels of distribution, its product lines appeared to remain as strong as the legendary Eddie Bauer name.

Principal Subsidiaries

Eddie Bauer of Canada, Inc.; Eddie Bauer International, Inc.

Principal Competitors

Abercrombie & Fitch Co.; American Eagle Outfitters, Inc.; Coldwater Creek Inc.; Cornerstone Brands, Inc.; Dillards Inc.; Euromarket Designs Inc.; Federated Department Stores, Inc.; The Gap, Inc.; Hanover Direct, Inc.; J.C. Penney Company, Inc.; J. Crew Group, Inc.; The J. Jill Group, Inc.; L.L. Bean, Inc.; Lands End, Inc.; The Limited, Inc.; The May Department Stores Company; Montgomery Ward, LLC; The Neiman Marcus Group, Inc.; Nordstrom, Inc.; Pier 1 Imports, Inc.; Saks Incorporated; Sears, Roebuck and Co.; The Talbots, Inc.; Target Corporation; Wal-Mart Stores, Inc.; Williams-Sonoma, Inc.

Further Reading

Chandler, Susan, New Fashion Focus Helps Eddie Bauer Rebound, Seattle Times, August 29, 1999, p. F1.

Eddie Bauer: A Name You Can Trust, Catalog Age, September 1993, pp. 13536.

Eddie Bauer Catalog Sidesteps Recession Doldrums, Direct Marketing, November 1983, p. 72.

Eddie Bauer: The Man Behind the Name, Pacific Northwest Magazine, May 1983, pp. 6164.

Enbysk, Monte, Snug Fit: Eddie Bauer Inc. Has Profited Handsomely from Acquisition by Spiegel, Tacoma News Tribune, February 27, 1994, p. F4.

Evolution of a Down-Wear Retailer, New York Times, March 12, 1981, p. D4.

George, Melissa, Why Eddie Bauer Is Lost in the Woods, Grains Chicago Business, August 10, 1998, p. 1.

Green, Jeff, Bauer Power, Brandweek, July 5, 1999, pp. 1617.

Hanover, Dan, EddieBauer.com Gets It Done, Chain Store Age, October 1998, pp. 19798.

Lim, Paul J., Eddie Bauer Plans Aggressive Expansion, Seattle Times, January 18, 1996, p. C1.

Moriwaki, Lee, It Takes More Than Flannel, Seattle Times, October 19, 1997, p. E1.

Nogaki, Sylvia Wieland, Out of the Woods: Eddie Bauer Hikes Trail Leading to Higher Profits, Seattle Times, July 26, 1993, p. E1.

Palmeri, Christopher, Indoor Sportsman, Forbes, March 29, 1993, p. 43.

Pasternack, Edward D., Eddie Bauer Expanding in Japan and Germany, Direct Marketing, March 1996, pp. 36, 3839.

REI, Eddie Bauer Expand, Chain Store Age Executive, August 1987, pp. 4647.

Retreat, Hell: Four Contrarians Who Hear Opportunity Knocking, Business Week, January 14, 1991, p. 64.

Ricketts, Chip, Eddie Bauers Southern Expansion Push Includes Metroplex, Dallas Business Journal, February 26, 1990, p. 3.

Schwadel, Francine, Waters Resigns from General Mills, Pursues Purchase of Units He Managed, Wall Street Journal, January 11, 1988, p. 32.

Schwadel, Francine, and Richard Gibson, General Mills Is Putting Up for Sale Talbots, Eddie Bauer Clothing Chain, Wall Street Journal, January 8, 1988, p. 4.

______, General Mills to Sell Last Retail Units, Talbots and Bauer, for $585 Million, Wall Street Journal, May 19, 1988, p. 4.

Spector, Robert, Eddie Bauers New Look, The Weekly, January 2, 1985, pp. 2022.

______, The Legend of Eddie Bauer, Lyme, Conn.: Greenwich Publishing, 1994.

Warren, James R., Eddie Bauers Guarantee Was Key to Firms Success, Seattle Business Journal, June 13, 1983, pp. 67.

Jeffrey L. Covell

updated by David E. Salamie

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Eddie Bauer, Inc.

Eddie Bauer, Inc.

15010 Northeast 36th Street
Redmond, WA 98052
(800) 625-7935
www.eddlebauer.com

Eddie Bauer, an outdoorsman who loved to fish and hunt, formed a company bearing his name in 1920 in Seattle, Washington. The company originally specialized in stringing tennis rackets, but it slowly grew into the favorite place for rugged sportsmen like Bauer to purchase gear for all kinds of outdoor and recreational activities. Over the years, the business expanded to include home furnishings and business and casual clothing for men, women, and children of all ages. With over six hundred stores, twelve annual catalogs, and a much visited on-line shopping site, Eddie Bauer has staked a firm claim as one of the leading apparel and mail-order businesses in the world.

A Sportsman's Dream

Eddie Bauer was born in 1899 on Orcas Island, outside Seattle, Washington. The remote and rugged island taught young Bauer all about surviving in the wilderness, and he spent his days learning to fish, trap, and hunt. When Bauer was barely in his teens, he and his mother moved to Seattle. Once there he immediately sought out opportunities to earn money. Bauer's sports skills were second to none, and he quickly earned a reputation for fishing, hunting big game, and target shooting.

Instead of going to high school, Bauer worked as a stock boy at Piper & Taft sporting goods store. In 1917, he created a window display that featured him stringing tennis rackets. During a three-and-a-half hour period, Bauer wowed the community by stringing twelve rackets in a row. This feat added another notch to his belt, as Bauer became more and more known in Seattle as an athlete and all-around outdoorsman. Bauer then decided to string rackets for profit and rented a small space for $15 per month. Eddie Bauer's Tennis Shop soon attracted a regular clientele and earned $10,000 within a year.

A New Venture

Taking his earnings and securing a small loan, Bauer rented a twenty-foot shopfront and started his own business in 1920. Since tennis was a seasonal sport, he expanded his services to include golf, hunting, and fishing as well. Within a few years, Eddie Bauer's Sporting Goods was doing a brisk business and had added an unconditional guarantee to not only attract customers, but to keep them. Most businesses of the day did not have guarantees, and some did not even allow returns. Bauer, however, took a cue from legendary outfitter L.L. Bean (see entry) of Freeport, Maine, which had offered an ironclad guarantee since its formation in 1912. Bauer called it his "creed," and it remains an important part of Eddie Bauer even today, listed on the company Web site: "To give you such outstanding quality, value, service and guarantee that we may be worthy of your high esteem."

Eddie Bauer at a Glance

  • Employees: 8,000
  • Acting CEO: Martin Zaepfel
  • Subsidiaries: Eddie Bauer Germany; Eddie Bauer Home; Eddie Bauer Japan; Eddie Bauer Kids
  • Major Competitors: Abercrombie & Fitch; American Eagle Outfitters; Gap, Inc.; Lands' End; LL Bean, Inc.
  • Notable Products: Eddie Bauer bocci ball set; Eddie Bauer Signature eyewear; Eddie Bauer Special Edition Ford Explorers and Expeditions; AKA Eddie Bauer clothing line; EBTek activewear

By 1930, Bauer had married and become a father. His store had evolved into a sportsmen's paradise, stocking a wide

Timeline

1920:
Eddie Bauer's Tennis Shop opens; name soon changes to Eddie Bauer's Sports Shop.
1936:
Bauer designs the quilted down jacket.
1942:
The B-9 Bomber Jacket is made famous during World War II.
1945:
The company's mail-order business takes off.
1953:
Catalog sales reach $50,000; company outfits expedition to the Himalaya Mountains.
1957:
Sales top $500,000; company outfits expedition to Antarctica.
1960:
Eddie C. Bauer and William Niemi Jr. join the company.
1968:
Founder Eddie Bauer retires; second store opens.
1971:
Company is sold to General Mills.
1983:
Ford Motor Company partners with Eddie Bauer for special edition SUVs.
1986:
Eddie Bauer Sr. dies at age eighty-six.
1988:
The company is sold to the Spiegel group.
1991:
Eddie Bauer Home is launched.
1993:
The first international stores open.
1996:
On-line shopping service begins.
1997:
Eddie Bauer begins designing and selling furniture.
1998:
The company forms partnerships to sell strollers, eyewear, and bicycles.
2000:
Eddie Bauer stores open in all fifty of the United States.
2002:
There are six hundred stores worldwide.

variety of clothing and sporting equipment made by over a hundred employees. Bauer had also become skilled at producing his own one-of-a-kind items and had learned to apply for patents to protect his products. For example, his "Bauer Shuttlecock" brought the little known backyard sport called badminton to popularity in 1934, and his quilted down-filled jacket called the "Skyliner," which was launched in 1936, was a godsend to hunters and campers in the winter months. The idea to use the fluffy, downy feathers of geese had come from war stories told about an uncle, a Russian soldier, who had fought in the 1904 conflict between the Russians and Japanese. According to Bauer's uncle, the Russian soldiers had survived the freezing combat only because of their down-filled coats.

Birth of the Bomber Jacket

Bauer continued to design and experiment with sporting equipment and outerwear. In 1942, at the request of the United States Army, he developed the B-9 Flight Parka, which became known as the "Bomber Jacket" since it was worn by thousands of World War II (1939-45) pilots. The company also provided the military with flight suits, sleeping bags, packs, snowshoes, and clothing as well. Approximately four hundred employees worked round-the-clock shifts to keep up with the demand.

The Bomber Jackets proved so popular that scores of soldiers who served in the war effort wanted to buy additional Eddie Bauer apparel and gear. After the war ended in 1945, the government gave Bauer a mailing list with the names of thousands of United States military personnel, many of whom had been outfitted by Eddie Bauer. Sending catalogs to these veterans led to a huge surge in business, necessary at the time since the Seattle business was experiencing some difficulties.

By the 1950s, the Eddie Bauer name appeared on many items, including apparel for each season and gear for a number of activities, including camping, climbing, skiing, fishing, hunting, badminton, and tennis. A women's division had also been formed, run by Bauer's wife Christine, who was generally known as "Stine." While the war had definitely given the Eddie Bauer name popularity and prestige, the company still struggled. Bauer's health had started to deteriorate and he needed help both physically and financially. He partnered with another Seattle businessman, William Niemi, who put money into the ailing retail company. By 1953, the catalog and mail-order division was bringing in sales of $50,000 a year, and grew phenomenally to $500,000 by 1957.

The Second Generation

In 1960, partners Bauer and Niemi brought their sons, Eddie Christian Bauer and William Niemi Jr., into the business. Eight years later, in 1968, Eddie Bauer Sr. retired and sold his share of the company, which was bringing in sales of around $5 million annually, to the Niemi family for $1.5 million. The expansion that would take the Eddie Bauer name to international fame began almost immediately. A second retail store opened in San Francisco, California, and in 1971, the company was purchased by the huge General Mills group, which had built its fortune on such food items as cereal, and cake and cookie mixes. General Mills had the stability and funds to expand Eddie Bauer throughout the United States.

In the 1980s, Eddie Bauer's focus began to shift from sporting goods to casual clothing and even, strangely enough, into the automotive market. Through an unusual partnership with the Ford Motor Company (see entry) in 1983 came a striking new line of sport utility vehicles (SUVs). Ford contributed the SUV, the immensely popular Explorer, while Eddie Bauer designed the rugged and fashionable interior. The earliest Eddie Bauer Special Edition Ford Explorer rolled off the assembly line in 1984 and was so successful that Ford's larger SUV, the Expedition, was added to the line, as well as other vehicles during the following years.

The German apparel and mail-order conglomerate Spiegel Inc. purchased Eddie Bauer from General Mills in 1988 for $260 million. Eddie Bauer continued its aggressive expansion, both in North America and abroad despite a retail slowdown. In 1993, the company launched its first men's fragrance, "Adventurer." That same year, it introduced a German mail-order catalog. In 1995, Eddie Bauer opened its first stores in Tokyo, Japan, and issued a Japanese catalog.

The company celebrated its seventy-fifth anniversary in 1995 with much fanfare: the first Eddie Bauer stores opened in Germany; AKA Eddie Bauer was launched, which is a business-clothing line for men and women; a joint venture was undertaken with American Forests to help reforest areas destroyed by fire; the company's first Web page debuted on America Online; and The Legend of Eddie Bauer, by Robert Spector, was published, which details the history of the company and the life story of its founder.

Over the years Eddie Bauer has supported and outfitted a number of famous expeditions, from a 1953 trek into the Himalaya Mountains to James Whittaker's successful climb to the top of Mount Everest in 1957. Athletes who wear Eddie Bauer gear have included an Alaskan Iditarod dogsled racer, professional men and women golfers, and members of the U.S. bobsled team at the Nagano, Japan, Olympics in 1998.

By 1996, Eddie Bauer had expanded its Web page into an entire site complete with company information and an online shopping service. Licensing agreements had become one of the company's favored avenues for progress, and there were many from 1997 onward, including partnerships with the Lane Company for the Eddie Bauer Home Collection; Giant Bicycle to produce a range of bikes; Signature Eyewear to produce the Eddie Bauer Eyewear Collection; children's products giant Cosco Inc. for Baby by Bauer car seats, strollers, and accessories, and a deal with the Target Corporation (see entry) to sell a variety of products at the chain's discount stores. Eddie Bauer's environmental pact with American Forests had done well too, raising $2.5 million dollars to plant 2.5 million trees in the United States.

Eddie Bauer Enters a New Century

The new century brought additional sponsorships and joint ventures for Eddie Bauer, including an alliance with National Geographic to produce a large-screen-format movie about legendary explorers Meriwether Lewis (1774-1809) and William Clark (1770-1838). A retail milestone was reached in 2000 when an Eddie Bauer store opened in Honolulu, Hawaii, which meant there were Eddie Bauer stores in every one of the United States. Linking the Eddie Bauer empire were several new Web addresses, with separate sites for the outlet stores, the growing on-line kids collection, and the home furnishings division.

In 2001 and 2002, the company widened its commitment to social responsibility with charitable donations and sponsorships of a number of groups, including American Forests, the Seattle Urban League, the National Association for the Advancement of Colored People (NAACP), and the Hispanic College Fund. After the World Trade Center was destroyed on September 11, 2001, Eddie Bauer workers throughout the United States raised over $1 million to help families of the victims.

While Eddie Bauer had concentrated more on apparel and less on sporting goods for several years, it began to turn some of its attention back to its outdoor roots and it regained its status as a premiere outfitter for North America's weekend warriors and recreational enthusiasts. As former chief executive officer (CEO) Rick Fersch, who left the company in 2002 after fourteen years, noted to the Daily News Record in May 2000, Eddie Bauer stands for "trend-right clothes for life's adventures."

Eddie Bauer University, known as EBU, was created in 1994 and is located at company headquarters in Redmond, Washington. All new employees go through a two-day seminar at EBU, and return periodically to take classes to develop professional skills. There are more than one hundred courses offered each year.

The departure of Fersch was one of several problems plaguing Eddie Bauer in 2002. Sales for the retail stores had slumped, and parent company Spiegel had begun closing some of the less profitable ones. On-line sales, however, were strong and represented a growing portion of the company's overall revenue. While looking for someone to run Eddie Bauer, Spiegel divided the responsibilities among several top-level managers, including its own Martin Zaepfel, who was Spiegel's vice chairman, president, and chief executive.

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