Eddie Bauer, venerable outdoor apparel retailer, declares bankruptcy
cbsnews.com59 points by mgh2 4 hours ago
59 points by mgh2 4 hours ago
I remember back in high school, everyone would have an Eddie Bauer backpack except the random person with a Jansport. People would always insist on how you had to take advantage of the quality guarantee:
"You have a bent zipper and a small tear after lugging your books for years? Great! Take it to the store and argue with them that it's defective until they give you a new backpack!"
LL Bean used to have a similar return policy but people started abusing it; now you only have a year.
A number of outdoor sports retailers that used to have no-questions-asked return policies and internal repair departments have dropped them. I have known people who basically had a practice of indefinitely returning worn out clothing for replacement. I did return a jacket to Patagonia a number of years back and they gave me a decent credit but, in my defense it had basically completely delaminated.
When LL Bean ended their lifetime return policy, their CEO wrote this:
> Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.
People were buying old items on eBay and returning them to the store to get a brand new item.
I think that's increasingly true. A lot of people want to game the system and you mostly don't want to place the burden of what's reasonable on a low-paid customer service worker. So you set reasonable and (mostly firm) time limits and let the processes take their course. Should be some wiggle room of course. But it's not reasonable to offer lifetime replacements unless people are willing to pay the 2x to 3x prices that implies--which very few will.
Bad faith actors ruin everything good eventually. From small things like return policies for retail chains, to the political process of an entire country.
I sent an Eagle Creek suitcase in and they honored the warranty even though it's maybe 15 years old. They sent it to a repair place who actually fixed every single issue with it (first a broken wheel, then later a torn pocket, broken buckle, and missing zipper pulls). I honestly can't believe that the repairs are cheaper than just replacing it, but it has worked out really well. It's a shame more places don't do that.
I still main a Jansport backpack for taking my laptop in. It has minor wear and tear but works great after >10 years.
It amazing that even 25 years after mainstream ecommerce that we're still seeing the effects work their way through retail. Good reminder for anticipating how and when other majorly disruptive technologies like autonomous vehicles and AI will have impact.
It's not really ecommerce. it's PE parasites selling the brand equity.
The article doesn't really mention: Authentic Brands Group, an asset-light PE org, bought it in 2021; a company called Outdoor 5 LLC now licenses Eddie Bauer's e-commerce and wholesale operations; and we're well deep into enshittification. You can find widespread complaints of bad product quality. Note that ABG wasn't the first PE company to own them, but they seem to have accelerated the enshittification / are doing a bust-out: turning them into a bottom-dollar contract manufacturer scam before people broadly realize the brand name no longer merits the quality reputation it has/had.
These brands are being bought by PE because their business models are under attack by low-cost competitors on one side, and e-commerce on the other. They no longer have a way of differentiating themselves and winning customers, so they become less valuable, and Private Equity investors buy them out at a 'salvage value'. PE often pursues risky strategies in an attempt to make the brand profitable again, and these strategies often fail. Stories like EB's are not ones of PE buying and destroying otherwise successful companies.
It's very popular on here to attack PE--which I'm not going to especially defend. But it's also the case that PE also tends to come in when a company is already troubled in some manner. One answer I guess, is just go out of business on your own which many companies do.
> One answer I guess, is just go out of business on your own which many companies do
Yes. One of the genuine services (in an economics sense) PE provides is to do the dirty reputation-ruining cash-grab tricks that original founder/owners don't have the stomach for.
Private Equity has been buying up vets in the UK and jacking up prices massively, causing all sorts of knock-on negative consequences. Vets in the UK were not failing before.
Unfortunately our competition authorities are toothless. Their proposed remedy is that vets will have to publish prices on their websites from now on. Woohoo.
https://www.bbc.co.uk/news/articles/c8j3020kl04o
https://archive.ph/ikhpP (link to FT.com)
First, I agree with everything you've said.
But my question is, how long has this been going on for? I'm in my late 40s. I remember as a kid thinking Schwinn bicycles were the "cheapo" brand. My father, however... would would be in his 90s now... remembered them as a top tier brand.
I have this theory that the reason a lot of prices on goods we've loved our whole lives don't keep up with inflation is because brand loyalty has SUCH power that it's worth it for people to buy and enshittify those brands -- so that they can sell them to us as we age at the prices we are used to paying for them.
They make newer "luxury" brands to sell to younger people who are still deciding what a "reasonable" price to pay for something is.
Tariffs again. I know it's not the only a contributing factor but it's self-inflicted damage.
I used to be an Eddie Bauer customer, but the quality of even their basic clothes (think business casual "docker" pants) rapidly diminished and their technical/functional gear was never remotely in the same category as Patagonia or Arc'teryx.
I still hold out hope for Patagonia in the post Yvon Chouinard era.
Their quality and customer service remain top-tier. Hell, they repaired my puffy jacket's zipper for free--hopefully it will have another decade of hard use.
You know, I'm past middle age, have seen this brand everywhere for many years, and I only just now read about the individual Eddie Bauer for the first time. Interesting dude.
On some podcast I was listening to one of the hosts described her father as an avid indoorsman. I thought that was great and am happy to have a new way to describe myself. :)
Not really a surprise. The people who buy outdoor apparel to actually spend time outdoors, like for hiking / hunting / fishing / skiing, long ago moved to other brands that were more technically advanced and focused on their specific activity. That left only the casual fashion consumers who are notoriously fickle, and Eddie Bauer failed to keep up with fashion trends. The products aren't bad necessarily but they're nothing special, you can get essentially the same stuff from a dozen other brands now.
I'll miss their medium-tall size if they're truly gone! Kind of the holy grail for tall skinny people. Anyone have recommendations of brands with similar fits?
I was an Eddie Bauer XLT guy for years until they suddenly made them way too skinny. Best fitting shirts ever. I am wearing one of the old ones right now. Land's End Tall sizing is a good fit although some of their fabric quality is a bit iffy—especially the colorfastness of their dyes. I have had two of six shirts be unable to endure professional stain spot removal by a dry cleaner. The greens and grays seem to be the most fragile.
I have always meant to take one of the few remaining right-fitting Eddie Bauer shirts to a tailor to see if they can be used as a pattern to make more shirts.
-> Its e-commerce and wholesale operations are not affected by the filing because they are operated separately.
Eddie Bauer the brand is not going bankrupt; the company that runs the brick-and-mortor stores in North America as Eddie Bauer is. So if you get your Eddie Bauer from anywhere that isn't an Eddie Bauer store you should be fine.
I'm the same size. They still have tall variant tops but tall bottoms/pants seem to have been gone for a while now.
Buy many now; they don't spoil. Keep them in the closet and pull out a new one when the old one wears out.
what will we keep our ready power tucked in our vests under now?
Just private equity doing what they do. It will live on as a zombie brand for cheap crap into eternity.
i think calling this another victim of PE is missing the point a little bit. i guess Catalyst Brands is technically PE, but they're not just a finance company treating these brands as assets to be milked and stripped for parts before they're killed.
Catalyst is a joint venture of Brookfield and Simon Property, both of which are shopping mall companies. Their other brands are all shopping mall fixtures. The story here isn't private equity doing the normal private equity thing, it's that shopping malls are dying.
> The story here isn't private equity doing the normal private equity thing, it's that shopping malls are dying.
That's true, but to me the more interesting question is: Why?
In Europe and Asia, indoor shopping malls are thriving. They're all over the place, and very popular. This place is a stone's throw from where I live, and it's always crowded: https://de.wikipedia.org/wiki/Shopping_City_Seiersberg
When I go to the US, indoor malls are either depressing ghost towns, or they're luxury-only complexes with a heavy security presence and a seemingly-intentional lack of amenities. (Like a Starbucks that only has three tables despite ample interior space, nowhere else to eat, etc.)
What's driving the weird variance in shopping patterns? Naively, I'd expect shopping malls to be more popular in the US, as Asia and Europe also tend to have "shopping districts" inside their (usually walkable) towns that often function, effectively, as open-air malls.
In the US, my observation is that some relatively-highend shopping malls are reasonably successful in some cities. But, near me, there's basically a dead mall that used to have Sears, Macys, and Penny as anchor tenants. All gone. I do have big box complexes (including around dead mall) that have some stores that seem to be pretty successful--supermarket and DIY.
But I don't know the last time I was in an indoor mall. In Asia and some areas of Europe, at least, I do think you have multi-floor complexes where you have pretty good eating but that doesn't tend to be the case in the US.
Yes - Valley Fair in San Jose is thriving even as all the other area malls turn into mausoleums. It would be interesting to study why. My guess is conspicuous consumption, people who want to be seen wearing certain brands want to be seen buying them too. For anything more pragmatic, it's just to easy to click Amazon.
I assume Santana Row is still doing OK as well although that's not really a classic mall. And a lot of Vegas malls seem healthy though it's been a few years--even if I sort of half joke I couldn't afford to buy anything at a lot of them.
As you say, there's always Amazon for a lot of things I might have bought in malls. I still want supermarkets and big box DIY stores but I don't really need to go into malls for those.
One reason is that Valley Fair is the closest there is in the Bay Area to a good East Asian mall. For example, their recent expansion brought in a good variety of restaurants, particularly Asian restaurants, that attract the wealthier Asian residents of Silicon Valley (plus Whites, who in the Bay Area are pretty Asian in habits). These bring in a crowd of regular visitors that will stick around to occasionally shop at the expensive stores, even if they don't love conspicuous consumption enough to buy there all the time. Also a decent number of more youth-focused stores that draw in all demographics - after all, everyone in the younger generations loves anime and K-pop.
1. Americans got a bit poorer due to inflation.
2. Brand quality went down to equivalent or less of no-name dropshipped goods in order to keep similar dollar prices for goods.
3. Cost of real estate spiked incredibly, putting even more pressure on retail margins.
4. American logistics is seriously good, in cities 24-hour delivery can be common even for small or inexpensive things.
5. Once there wasn't a quality or convenience reason to prefer the shopping mall, many were already struggling quietly, they just hadn't run out of cash yet.
6. The pandemic happened right as all these things converged, accelerated all of them, and wasn't really recoverable.
>I'd expect shopping malls to be more popular in the US
What you may be missing is how much retail shopping space the US has. It's something like 10x the sq/ft that Germany does for example. This leads to massive amount of cannibalization as trends shift. The entire mall has to be able to generate enough revenue which is much easier with luxury complexes.
So, while malls are popular, the costs of indoor air conditioning and massive competition with online shopping and strip malls between the shopper and the indoor mall make it a difficult market.
And we have giant "big box" stores and overnight delivery that together are good enough for a lot of purchases. Some huge portion of the American public belongs to Amazon Prime and/or Walmart+ and/or Costco.
A lot of malls are basically surrounded by discount box stores like Walmart and Target, along with specialized ones like Barnes & Noble, Old Navy, Homegoods, DSW (shoes), and dozens of others at various price points. Even though walking through a mall is more arguably pleasant than driving around an arterial road and sprawling parking lots, you'll find better selection and often better prices at the box stores than the smaller mall storefronts. Sometimes you will find local independent stores setting up in malls, but I think rents make that hard.
And then thanks in part to obsolescence and disinvestment, going to the mall as an outing also doesn't really make sense anymore except as a rare novelty. The food options are typically pretty bad and overpriced by today's standards, restrooms are usually down a long and dirty hallway, etc.
>Its e-commerce and wholesale operations are not affected by the filing because they are operated separately.
>The bankruptcy doesn't affect Eddie Bauer stores in markets outside the U.S. and Canada.
So its physical US locations declared bankruptcy.
> it's that shopping malls are dying.
They've been dying for decades. The owners have just decided to stop trying to save it and instead hollow it out and sell it all off.
One data point - in my local Simon Property shopping mall, the Eddie Bauer store closed down a few months ago. A new LL Bean store is "coming soon".
In retail, a certain rate of chain/brand churn is what you'd expect. If the public feels that some chain or brand is iconic, or has been around forever - that does not magically protect the underlying corporation from missing the boat on marketplace changes, or having its management go downhill, or the founder selling out to PE, or whatever.
Or re-surfaced down the track as some kind of heritage outdoor brand.
I'm not positive, but I think they've already run that playbook once or twice. They are IN the cycle.
Where else will finance bros get quarter zips from??
Fratagonia?
They don't allow embroidered company logos unless you're a B-corp or a non-profit, IIRC. If you see someone wearing tech swag with logos on Patagonia, it's either old gear or someone in their company is a major asshole.
So buying a shirt and having it embroidered elsewhere is assholery? Why should Patagonia have control of merchandise after they sell it?
Makes me want to have some Patagonia stuff altered on principle...
Allegedly it was to keep people from trashing the garments when they left the company. I have a few nice jackets I really don't wear because I don't represent that organization, and they are way less valuable at thrift.
The rules are if you want to get bulk discounts from Patagonia, you're right that you can just buy the clothes and do whatever to them, you just pay retail.
The assholery aspect is more personal to me I think. I like that even though they're not exactly a grassroots cottage gear maker anymore, that Patagucci actually enable and encourage secondhand use via their worn gear and repair programs and messaging. I try to give space to people and orgs who are trying to do things thoughtfully, so if someone goes out of their way knowingly to disrespect that thoughtfulness, yeah I find that distasteful.
Finance bros moving on to Patagonia is probably the reason they’re filing for bankruptcy
Patagonia stopped doing custom logos on those pieces a few years back:
https://www.businessinsider.com/patagonia-no-longer-adding-c...
I'm not sure if that put a dent in the finance bros' style. Finance bros can of course still buy a bunch of the vests and have a third party do the custom logo for them.
Chapter 11 seems to be like a fashion trend these days. Everyone is doing it, sometimes multiple times in a very short time. It’s nothing more than accounting tool to restructure debt while being able to operate the company. Not saying it’s a good thing, but it isn’t as serious as it once used to be.