So long for Nau

To the shock of many in the regional business community, Nau, the Portland-based apparel maker with a well-known focus on sustainability, announced May 2 that it was ceasing operations. The company closed its retail outlets the next day and immediately began selling off its inventory online at a 50 percent discount.

Nau opened its doors in February 2007 to much fanfare. In November 2005, this magazine reported on the secretive plans for a company then known as UTW, a shortened handle for Under The Wire. “If there is a direct correlation between the size of a deal and the secrecy with which it is carried out, then the plans for UTW must be huge,” wrote Nik Blosser, president of Celilo Group Media, former parent company of Sustainable Industries, in an editorial.

That company, which eventually changed its name to Nau, had an estimated 18 employees in October 2005, many of them high-profile apparel professionals with experience at Nike Inc. (NYSE: NKE) and Patagonia.

As Sustainable Industries reported, SNEWS editors Michael Hodgson and Theresa Iknoian wrote of UTW: “If this team can pull off the business we believe they are in the process of developing (and if they can’t we’d be hard-pressed to imagine anyone else who could), it will be revolutionary in concept and execution, and it will have the potential to shake up the current retail and manufacturing marketplace.”

However, the well-qualified team didn’t anticipate bringing product to market until 2007. “With 18 employees and product over a year away, that equals a significant cash-burn rate,” Blosser wrote. And, ultimately, that cash-burn rate may have proved devastating to the company’s finances.

It wasn’t as though the company was caught off-guard by its need for financing, however. The company knew it would need cash to stay afloat, but hadn’t expected its need for a cash infusion to coincide with a pervasive credit crisis. CEO Chris Van Dyke told The Oregonian in May that Nau was forced to close because it could not secure another round of financing, due to an economic climate he characterized as “clearly a recession.”