Eddie Bauer aims for yoga practitioners with new clothing line
For a noncompetitive activity, yoga is getting awfully cutthroat.
This month, Bellevue-based Eddie Bauer became the latest clothing company to introduce a new yoga line for women, hoping to grab a slice of the estimated $5.7 billion that Americans spend annually on yoga classes and products.
Chief Executive Neil Fiske, who took over Eddie Bauer in summer 2007, said from the outset that he wanted to remake the company into a serious activewear brand.
The new yoga line, which promises stretchable, breathable fabrics, is “just one piece” of that strategy, he said.
“I think the casual-wear market is more crowded than the activewear market, and the activewear market is growing faster than the casual market,” Fiske said. “The key for us is being focused on what we offer, and what we offer is high-performance yoga wear that’s respected by yoga practitioners.”
Eddie Bauer sells four styles of women’s yoga pants for between $49.50 and $64.50, tank tops for $29.50 to $44.50, and jackets for $59.50 or $64.50.
Those prices put Eddie Bauer above Old Navy and Target but below Lucy Activewear and lululemon athletica — yoga specialists that offer some clues about which way the market is headed in a down economy.
Greensboro, N.C.-based VF, which owns Lucy Activewear, said last week its contemporary brands turned negative in the third quarter and were among the hardest hit in the fourth quarter, posting a year-over-year sales decline of about 5 percent. Lucy comprises VF’s contemporary segment along with denim brand 7 For All Mankind.
“We remain enthusiastic about the Lucy brand, but we recognize that the current economic environment is making our turnaround efforts more difficult,” Mike Egeck, president of VF’s contemporary brands, told analysts in a conference call. Those efforts include remodeling stores and giving products more “technical benefits.”
Vancouver, B.C.-based lululemon athletica had been posting double-digit gains in sales at stores open at least a year until last fall, when quarterly same-store sales growth slowed to 4 percent. Lululemon subsequently cut its profit forecast for fiscal 2008, citing the tough economy and weak Canadian dollar. Its prices include $98 for reversible flare-leg pants and $52 for tank tops with “anti-stink” elastic.
Bay Area retail consultant Jeff Green said the upscale yoga-apparel brands are hurt by an overall decline in discretionary spending.
“Women will spend money on their families, their children, but not on themselves right now,” he said.
A workout look
Green, who advised Lucy during a period of rapid store expansion from 2004 to 2008, said he suspects that Eddie Bauer is trying to appeal to “time-stressed women” who like to project an image of working out, whether or not they actually do.
It’s a natural fit for Eddie Bauer, he said, but the competition is stiff. Others selling yoga clothes include J.Crew, Title Nine and Victoria’s Secret.
“A lot of discounters like T.J. Maxx and Target are starting to get into this niche, and they may be more successful given their mass and value appeal,” Green said, referring to the recession. “Eddie Bauer is getting into it a little late.”
T.J. Maxx and Marshalls sell yoga pants starting at $16.99, and tops for between $9.99 and $29.99. Sonya Cosentini, a spokeswoman for Framingham, Mass.-based TJX Cos., which operates T.J. Maxx and Marshalls stores, said women aren’t buying the clothes to do just yoga — but “also other things like run errands or lounge around the house.”
“It’s all about comfort and finding dual uses for things in your wardrobe,” she said.
Starting from parkas
Founded in 1920, Eddie Bauer rose to fame making down parkas for World War II pilots and outfitting major mountaineering expeditions. Its focus shifted to selling casual clothes for women after the Spiegel Group bought it in 1988. Fifteen years later, Spiegel filed for bankruptcy protection, and Eddie Bauer emerged as an independent company in 2005.
Eddie Bauer lost money in 2006, 2007 and the first nine months of 2008. Describing the fourth-quarter retail environment as “brutal,” the company plans to cut up to $15 million from its operating cost structure this year, after eliminating as much as $50 million last year.
Nearly 150 jobs at its downtown Bellevue headquarters have been cut, and its stock is down to less than $1 on the Nasdaq.
The new yoga line, which is sold on the company’s Web site and at 275 stores in the United States and Canada, aims to give customers a new reason to shop, Fiske said.
“If you keep doing the same things in a recession, you’re destined to go down with the market,” he said. “We’re hoping to offer customers something new that’s a great value and a relevant part of their lifestyle.”
Jennifer Black, a Lake Oswego, Ore., retail consultant who describes herself as a physically fit baby boomer, said she’s checked out Eddie Bauer’s yoga line and likes it.
“The fabrics are really nice, and they hold you in,” she said. “For someone who wants that lululemon look but doesn’t want to spend that kind of money, it’s a good compromise.”