Nau Calls It Quits, WebFront Experiment Bombs

May 5, 2008

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Sustainable clothier Nau Inc. has closed shop, The Oregonian reports. The company says it couldn’t raise the funds needed to continue operations. The company, founded in 2005, had received more than $34 million in capital as of July 2007.

Nau’s clothing line was made entirely of recycled polyester, certified organic fabrics, and biodegradable corn fiber. Because the fabrics cost 25 percent to 30 percent more than those used by other apparel makers, the company’s success depended not on traditional retail stores but ‘WebFronts.’

The WebFronts offered free shipping and a 10 percent discount if customers ordered clothes online from its in-store kiosks.

Nau believed that with the strategy it could hit 72 percent gross margins, compared to 45 percent to 60 percent at other merchants, despite the high cost of its fabrics.

That, obviously, didn’t pan out.

The company employed 60 at its Portland headquarters and 35 in its five Webfronts nationwide. Its fifth store opened less than two weeks ago in Los Angeles.

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