Eddie Bauer banks on basics for season

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Eddie Bauer has a lot at stake this holiday season.

With its parent, The Spiegel Group, in bankruptcy court, the sportswear retailer has banked on a back-to-basics strategy to turn its fortunes around. After trying to remake itself as an also-ran to Gap Inc.'s Banana Republic, it has gone back to the clothing that its namesake founder made famous. Its holiday effort, created by Mullen Advertising, Wenham, Mass., and which broke Nov. 18, promotes gifts such as flannel shirts and knit caps and gloves.

The company tried four different positionings in the last five years, trying to chase "easily influenced hipsters," said chief marketing officer Engle Saez. But when he joined Eddie Bauer in March 2002, he was handed "a significant piece of research" that showed the brand's real equity was in its outdoor heritage.

Casting for a quick way to reposition the brand, Mr. Saez seized on the line of washable suede being launched for fall 2002. Renamed Seattle Suede, it was backed with print ads of prairie landscapes and text praising the outdoor life.

"This was as much an exercise in launching Seattle Suede as it was a way to rally the company," Mr. Saez said.

That campaign, which was consistent across all channels, was also handled by Mullen, now the sole agency of record (previously, stores, Internet and catalog sales all advertised separately). Stores were revamped and advertising spending tripled for this year and is expected to grow 40% to 50% in 2004. Eddie Bauer spent $5 million in 2002, according to TNS Media Intelligence/CMR.

mixed results

The jury is still out on the transformation. Eddie Bauer reported an increase in same-store sales for September, the first such increase since April 2000. But sales slid 6% in October, which Spiegel management blamed on the warm weather's effect on outerwear sales.

Spiegel has placed other units on the block, most recently, its Newport News apparel catalog, but seems to be banking on Eddie Bauer as part of its reorganization plan. Earlier this month, management petitioned the judge overseeing the bankruptcy for authorization to open up to 17 new stores. The court's decision is pending.

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