Now is the time for Nau 2.0 - SNEWS

Now is the time for Nau 2.0

Nau, six weeks in the grave, has been given the opportunity for a new life by kissing a toad -- a Horny Toad to be exact. And in this sequel, Gordon Seabury, CEO of Horny Toad, is acting the part of the prince following his company's acquisition of the bulk of Nau Inc.'s assets. Terms of the deal were not announced. Nau will operate as a separate business in the Horny Toad Activewear Inc. portfolio.
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Nau, six weeks in the grave, has been given the opportunity for a new life by kissing a toad -- a Horny Toad to be exact. And in this sequel, Gordon Seabury, CEO of Horny Toad, is acting the part of the prince following his company's acquisition of the bulk of Nau Inc.'s assets. Terms of the deal were not announced. Nau will operate as a separate business in the Horny Toad Activewear Inc. portfolio. Click here to read the press release posted to SNEWS® as soon as the news was made public.

In acquiring Nau, Horny Toad snapped up the Nau domain name, the trademark, all designs and creative assets, as well as intellectual property including the kiosk concept.

Of the 60 employees who were at Nau when the company shut down on May 1 (click here to read that story), 12 to 13 will continue on with the new company, Nau's marketing director Ian Yolles told SNEWS®. Currently, the Nau team includes: Peter Kallen - design Studio; Lesa Street - design studio; Mark Galbraith - design studio; Susan Strofe - technical design and development; Jamie Bainbridge - fabric development; Hal Arneson - creative director; Ian Yolles - marketing; Andrew Barret - production; and a new face, Jolie Giese - general manager.

It was Nau who reached out to Horny Toad for a lifeline once the decision had been made to close its doors in May, Yolles told us.

"When we made the decision six weeks ago to wind down operations, there was an extraordinary amount of customer response. There are 91 comments in our blog now with wonderful quality and depth. In addition to that, we received hundreds of hundreds of emails -- each so moving to read," said Yolles. "That outpouring, coupled with our personal passions to see what we had started through, inspired us, and we began to reach out to various apparel companies.

"Our feeling was there was a lot of value here, and if we could find an interested partner in the form of an existing apparel company that made sense, and one that would mesh with our underlying ethos of a sustainable business model, it would be a positive thing for Nau," added Yolles. "We understood the business model would have to change, but that set us off on the path where we began to make calls."

While noting that Nau's phone calls got returned quite quickly, it was Seabury who recognized the opportunity immediately and, according to Yolles, consulted with his own board and then the Nau board. After which, Seabury initiated a very deep process of due diligence.

"We were impressed by the way in which Gordon jumped in and did it with an eye to every detail, while understanding how our company and his would be perfect partners," added Yolles.

Nau will continue to sell direct to consumers via a revamped website portal, which will launch on Aug. 1. The company also will begin partnering with select retailers. The plan, according to Yolles, is to unveil the fall/winter 2008 line at the Lizard Lounge (Horny Toad's retail store -- a creative venture that is part social networking, part retail sales) in Portland, Ore., in early fall, we were told.

Nau has also moved -- a few blocks away from its original digs -- to occupy unused space adjacent to the Lizard Lounge in Portland's Pearl District. True to form, Mark Galbraith, head of the Nau's design team, is serving as the general contractor during the construction of the new offices.

While there will be changes in location, staffing, operations and some infrastructure, one thing that will not change is Nau's philosophy or its Partners for Change program, Seabury told SNEWS®.

"Horny Toad -- which has, as a part of its corporate DNA, fully embraced the concepts of social responsibility and sustainability -- has committed to continue giving a percentage of every sale of Nau product to organizations working for positive change and continuing to involve customers directly in that giving process," said Seabury.

As part of Nau's version 2.0 resurgence, its blog, The Thought Kitchen (http://blog.nau.com), will continue as a place where people can learn about and discuss what is going on at Nau, Yolles told SNEWS®.

One important aspect of the Nau model that will change is the brand will be available to select retailers. Seabury told us that his reps have been given right of first refusal (they learned of the Nau acquisition on June 23) to decide if they want to add the Nau product line to their rosters.

Initially, because the rep network is not yet set up, and because the company is not ready for a trade show exhibition, Nau will be sold selectively to retailers that are, as Seabury put it, "leading influencers in their markets who care passionately about sustainability and community involvement." He added that the company would either fly retailers into Portland for visits, or make special visits to show the line as needed. He said he hopes to have all the organization in place to be able to show at Summer Market 2009.

SNEWS® asked Seabury about the kiosk concept that Nau employed in its stores during its short-lived existence, and it was confirmed Horny Toad will seek to use that same technology in stores moving forward, beginning with the Lizard Lounge.

"We have played around with a concept called the Fit Center with some of our retailers, where they carry a closet full of size runs to fit customers, and we point online customers to those shops, but the kiosk that Nau has is so much more advanced and we are going to explore that," said Seabury.

Interestingly, Yolles said that Eric Reynolds, one of Nau's founders, had the original vision of placing the kiosks in retailers around the country, so customers could purchase Nau products directly from the company without the retailer carrying multiple sizes and colors. Now, it looks like Horny Toad will work to make that vision a reality.

SNEWS® View: It is appropriate that, since we were the first to write about the Nau concept three and a half years ago, breaking the news to the world (click here to read), that we are the first to hear from Nau regarding this news. We learned of the acquisition in process earlier in June, but as is our style, kept quiet about it until we knew the deal was inked and final.

For some of the Nau team, like Yolles and Galbraith, who have been with the company from its inception, this acquisition means a change in a good way. No more worrying about raising capital, and then when you do, ramping up to raise more. They are effectively off the fundraising treadmill and now know where their funding is coming from and how much, which means the business can now be grown in an organic fashion -- and that is a good thing.

Also, Nau will suddenly be available to consumers not just directly through the website, but through retailers around the country. That means the brand will get far more exposure than it was getting with the methodical store build-out it was experiencing with the old model. Many critics said the problem with the original model was the absence of a wholesale part of the business plan. It is in play now.

For Galbraith, it means he now has a bigger sandbox to play in with sustainable urban designs that can crossover between high-end fashion stores and outdoor specialty. And for retailers who are able to sell Nau, it's an opportunity to be able to amp up the merchandising mix and offer a unique product that will resonate with customers willing to pay top dollar for clothing, not ones seeking discounts and mark-downs.

We recall a conversation with Seabury several years ago, as he mused about ways he might start expanding his brand reach and influence into other markets and higher-end fashion stores, without abandoning his solid, Santa Barbara, Calif., outdoor roots. "Nau," he's on his way.

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