Eddie Bauer — Investor Presentation (November 2007)
25 slides from Eddie Bauer's investor presentation, Nov 2, 2007
Slide 1: Eddie Bauer Est. 1920
CMM Foun EST. 1920
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements: This presentation contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts,
Slide 3: Today's Discussion
TODAY'S DISCUSSION Focus on longer-term direction and potential Early in turnaround Quiet period makes it difficult to comment on near-term outlook
Slide 4: Investment Thesis
INVESTMENT THESIS A brand with comeback potential and substantial upside With a revitalized brand positioning, merchandising and marketing strategy (in process) And opportunity for significant cost leverage Playing in an attractive, growing segment with unique competitive advantages
Slide 5: Eddie Bauer: Corporate History
EDDIE BAUER: CORPORATE HISTORY 1920 Eddie Bauer Founded Eddie sets up his own tennis-racket stringing shop in Seattle, WA 1936 "The Skyliner" After almost freezing to death on a fishing trip, Eddie designs The Skyliner, America's first goose down jacket to be granted a U.S. patent (1940) 1945 First
Slide 6: Brand Assets
BRAND ASSETS Founder story and ethos Residual equity and consumer goodwill Heritage collateral, authenticity True multi-channel position
Slide 7: Historical Sales Performance
HISTORICAL SALES PERFORMANCE Note: Net sales figures for 1989-2001 do not reflect minor adjustments for handling of deferred revenue Source: Internal Audited Financial Statements; Form 10; Form 10-K
Slide 8: Eddie Bauer Today
EDDIE BAUER TODAY Note: "Other" in Direct sales line includes $81,000 of "other merchandise sales;" store count includes U.S. & Canadian stores Source: 2006 Form 10-K Net sales $1,013M Retail & outlet sales Direct sales $700M $256M Total stores 394 Retail stores Outlet stores 279 115 Website visits
Slide 9: Years of Drift
10 YEARS OF DRIFT 1996 2006 GSF (retail) Total retail sales $430 $939M Men's Women's Non-Apparel Retail sales mix (% of total) 47% 32% 21% 40% 49% 11% $243 $455M Avg. retail store size (SF) 6,580 6,574 Total retail stores (Year-End) 350 279 Note: All data excludes outlet stores (full-line retail sto
Slide 10: Looking Ahead: Five Key Priorities
LOOKING AHEAD: FIVE KEY PRIORITIES Brand identity Merchandising strategy and execution Marketing Costs Talent and organization
Slide 11: Rebuilding the Eddie Bauer Brand Identity
REBUILDING THE EDDIE BAUER BRAND IDENTITY Back to the future: brand renaissance a la Burberry, Coach, J. Crew Modern re-interpretation of our heritage and our founder Built for the active, outdoor lifestyle A premium brand known for its legendary quality, value and customer service Target customer L
Slide 12: The Eddie Bauer Guy
THE EDDIE BAUER GUY
Slide 13: Merchandising Strategy: Key Principles
MERCHANDISING STRATEGY: KEY PRINCIPLES Inspired by the active, outdoor lifestyle Re-claim authority in outerwear Re-build men's business Nail the key items and streamline the assortment Get paid for "new:" bigger statements and launches Re-establish: credibility, authenticity, value Clarify pricing
Slide 14: Outdoor Category Is Attractive and Growing
OUTDOOR CATEGORY IS ATTRACTIVE AND GROWING Acquired by VF Corp. in 2000 Note: 1995-1999 data for the North Face taken from TNF 10-Ks; 2000-2006 data for The North Face is estimated based on VF Corp. press releases. VF Corp. press releases state double-digit growth during 2000-2006 for Outdoor catego
Slide 15: Shift in Direct Must Be More Dramatic
SHIFT IN DIRECT MUST BE MORE DRAMATIC Current assortment even more skewed to women & dress casual Major upgrades required: Production values, imagery, models, styling, copywriting, storytelling, "template" Guiding principles: Leverage the multi-channel customer Dual-gender positioning Show the full
Slide 16: Opportunity to Grow Through Segmentation
OPPORTUNITY TO GROW THROUGH SEGMENTATION M'S & W'S SPECIALTY CATEGORY-SPECIFIC HOME KIDS Source: J. Crew, L.L. Bean, Orvis and Lands' End catalogs
Slide 17: Outlet Model: Turn Fast, Make Cash
OUTLET MODEL: TURN FAST, MAKE CASH Narrow assortment: 30% fewer styles and SKUs Clearance: flush through residual Power-up known winners and big items Communicate value much more strongly Configure the supply chain for speed >5x inventory turn
Slide 18: Marketing Direction: Key Principles
Re-establish the authenticity, authority, personality and emotion of the EB brand MARKETING DIRECTION: KEY PRINCIPLES Leverage the power of the multi-channel customer Develop an integrated marketing/promotion/event calendar that powers up the big ideas
Slide 19: Our 67th Anniversary Down Event
OUR 67th ANNIVERSARY DOWN EVENT
Slide 20: Our 67th Anniversary Down Event
OUR 67th ANNIVERSARY DOWN EVENT
Slide 21: Our 67th Anniversary Down Event
OUR 67th ANNIVERSARY DOWN EVENT
Slide 22: Leveraging Costs, Building Cash Flow
LEVERAGING COSTS, BUILDING CASH FLOW In the process of evaluating major cost reductions Looking hard across business and see opportunity in a number of areas Distribution center Product sourcing Freight, logistics, direct-to-store Indirect procurement Marketing rationalization Professional services
Slide 23: Talent and Organization Development
TALENT AND ORGANIZATION DEVELOPMENT Filling key holes in the senior team Evaluating and sorting talent Building a culture that matches the brand Aligning structure to the new strategy
Slide 24: Investment Thesis
INVESTMENT THESIS A brand with comeback potential and substantial upside With a revitalized brand positioning, merchandising and marketing strategy (in process) And opportunity for significant cost leverage Playing in an attractive, growing segment with unique competitive advantages
Slide 25: Eddie Bauer Est. 1920
CMM Foun EST. 1920
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