Nau starts back up

Anyone familiar with the world of tech startups may be looking at the news that Portland-based apparel company Nau is back from the dead and nodding their heads. In the world of startups, one can just never tell.

When the high-end outdoor apparel company announced in early May that it would wind down operations and sell off its stock after a little more than a year of retail sales, it looked like the end of the road for the company. Many comments at various online forums lamented that the failed business with its dedication to environmental and social sustainability could spell doom for future attempts to "green" the apparel industry.

According to Ian Yolles, the company’s head of marketing, when Nau announced its demise, the outpouring of support on its blog and in other venues was "extraordinary. I would be stopped in the farmers market by people saying, ‘I cant believe this has happened,’" he says.

A round of calls to prospective buyers was started and many were returned, quickly, Yolles says. In late June, California-based Horny Toad announced that it agreed to buy all of Nau’s remaining assets for an undisclosed amount. Under the terms of the deal Nau will be a part of Horny Toad, but its line of products and brand name will remain independent and there will be no co-branding.

Horny Toad, a 12-year old "low-tech" outdoor apparel company that is "not too far from being a startup business" itself, according to its CEO Gordon Seabury, has an understanding of the challenges Nau faces as a young company. As a more established, mid-size company, Seabury says Horny Toad offers Nau economies of scale, contacts in the supply chain and retail partnerships to help the brand grow including deals with approximately 500 retailers in the United States, a partnership with a Canadian distributer that reaches 200 more retailers and a relationship with British-based Snow+Rock which has 15 stores in England

Seabury says Horny Toad plans on Nau reaching profitability in three years though resources are available and committed to seeing Nau through five years, if necessary.

Although the deal saves Nau, it is a decidedly smaller company now. When it closed, about 60 people worked in its Portland offices with many more at the company’s five retail locations. All those retail stores are now closed and just 12 people are left in the new offices in Portland. The number of styles it carried when it begins offering new products sometime this fall will be cut from 170 to an as-yet-undetermined number, Yolles says.

Nau based its brand identity on the philosophical leanings of its founders. They are dedicated to making products using organic and recycled textiles, reducing their environmental impacts and to supporting social ventures through a program that saw 5 percent of every sale donated to partner nonprofits.

Seabury says this mode of doing business is "an untouchable aspect" of Nau. Yolles said the company will be looking at the size and scale of the Partners for Change program, but it will still be a part of the business model in some form.