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Nau’s Brick-and-Mortar, Online Hybrid

As outdoor clothier Nau blurs the line between designing apparel for the streets and the slopes, the brand is exploring the retail frontier by integrating...

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As outdoor clothier Nau blurs the line between designing apparel for the streets and the slopes, the brand is exploring the retail frontier by integrating e-commerce with traditional brick-and-mortar stores.

This story first appeared in the April 23, 2008 issue of WWD.  Subscribe Today.

Nau, founded three years ago by Nike and Patagonia veterans with a mantra of environmental sustainability, technology and philanthropy, is turning to a concept known as a Webfront that combines conventional retail space with an online shopping site. The company launched its first California Webfront in Los Angeles’ Beverly Center on Saturday, kicking off a plan to more than double the number of Webfronts across the U.S. to nine this year.

Measuring about 2,000 square feet, a Webfront lets shoppers make an immediate purchase from the 150 styles that Nau offers each season. And it offers the use of on-site computer terminals to have a purchase shipped directly to a shopper’s home from Nau’s warehouse in Portland, Ore., with a 10 percent discount and free shipping. Customers also can scan cards printed for each item at kiosks dubbed product trees, where they can read about fabric content, find out about specials and pick the charity to which they wish to donate 5 percent of the sales.

Nau said because its stores are of manageable size — stocking no more than three units of each style in each size and color — it can save on rent and operating costs. In addition, the company deals with fewer returns because customers can try on clothes before buying them online.

“We’re able to focus on products,” said Chris Van Dyke, Nau’s president and chief executive officer. Webfronts allow “complete control of merchandise and less inventory.”

Nau’s strategy has earned it a spot on retail analyst Debra Stevenson’s list of companies to watch.

“They understood the importance of technology and e-commerce a long time before many other brands in their competitive space did,” said Stevenson, who follows fashion and retail at her consultancy firm Skyline Studios in Los Angeles. “As we see Nau becoming successful, we’ll see other brands and companies servicing a mainstream consumer jump in [the use of that model] as well.”

The Internet is becoming more important as a tool for fashion brands. Balenciaga plans to open its first e-commerce site in the U.S. on May 15, and labels ranging from New York & Co. to Quiksilver have said they want to grow their online sales channels, which yield better profit margins.

After starting online sales in February 2007, Nau opened four Webfronts in the next two months in Boulder, Colo., Bellevue, Wash., Chicago and Portland, where its headquarters are located. Following the launch of the shop in the Beverly Center, Nau plans to open another store in Portland, as well as one each in San Francisco’s Marina district, Seattle’s Fremont neighborhood and on Boston’s Newbury Street in the next three months. Nau aims to expand next year to New York, scout for more locations in Los Angeles and the San Francisco Bay Area and eventually go to Canada, Europe and Japan.

To be sure, the push to open more stores may seem counterintuitive to sustainability. But Nau envisions that more people will use the Internet and it can make a difference through its philanthropy.

“I don’t think sustainability is antigrowth,” said Van Dyke, who worked as a district attorney in Oregon and handled marketing and product development at Nike and Patagonia before joining Nau. “You simply grow it in a way where you minimize the negative environment and social impacts and maximize the positive….We’re giving away 5 percent of our revenue [to charities]. The more we can grow, the more good we can do.”

Though Van Dyke declined to disclose specific sales figures, he said Nau exceeded its first-year sales goal by 5 percent. That figure ranged between $5 million and $10 million, he said.

Ian Yolles, Nau’s vice president of marketing, said the Web site generated 20 to 25 percent of Nau’s first-year sales, with the Webfronts contributing the rest. Employing more than 100 workers, privately held Nau has raised $35 million from private and institutional investors, he said.

At the Beverly Center, Nau’s Webfront is tucked between the much larger — and glitzier — shops for contemporary sportswear labels Ben Sherman and A|X Armani Exchange, across the seventh floor from Louis Vuitton. Scott Fedje, Nau’s creative director of retail, said he tried to break away from the typical outdoor retail aesthetic.

“We wanted to make everything ’boutique,'” Fedje said, adding that he highlighted the women’s clothes in the center of the store to follow the fashion-centric theme at the Beverly Center, even though the men’s business is slightly larger than the women’s.

Displaying mottos such as “less is more” printed in soy-based ink dyes on recycled cardboard, the shop reflects the minimalist design of the $60 celadon-colored polos in a burnout organic cotton, $98 charcoal gray merino wool shorts and $198 muted purple dresses made of recycled polyester with snap-off sleeves and a cocoon-like neck.

The aluminum racks holding the alder wood hangers are installed at eye level, and the knee-high tables displaying $138 dark organic cotton jeans break up the plane. Energy-efficient lights spotlight photos of models climbing moss-covered tree trunks or skateboarding. The checkout counter is made of wood reclaimed from a factory in Canada, the mannequins are cast from recyclable resin and recycled aluminum covers the computer terminals.

Van Dyke said Nau’s target customers are in their late 20s to late 30s, living in urban areas, inclined to shop online and open to getting their news from blogs and Internet sites rather than television and newspapers. More customers than expected opted to have the merchandise shipped directly to them from a Webfront. While Nau had projected that a fifth of the customers who shopped at one of the four Webfronts in the first year would choose the ship-to-you option, it turned out that just less than half of them did.

Nau wants to extend its reach by adding sizes zero and 2 for women and size XXL for men. It also plans to introduce bags, wallets and personal organizers made of rubberized canvas and vegan leather in August. And considering the importance of celebrity endorsements and Van Dyke’s own Hollywood lineage (Van Dyke is the son of actor Dick Van Dyke), Nau would like to use its first Los Angeles store to make inroads into Tinseltown.

“We’re not just looking for stars,” Van Dyke said. “We like people who have the value set to reflect what we care about.”

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