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Mercer Island Reporter
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March 9, 1994     Mercer Island Reporter
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March 9, 1994
 

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Company booming under leadership of new top exec By Monte Enbysk Special to the Reporter visit to the Eddie Bauer Inc. headquarters in Redmond provides an insight into the 74— year-old Puget Sound-area company’s distinguished past. Automobiles must hike a winding road through a small forest to get to a wood-frame corporate office. Dozens of rabbits — known to some as “Bauer bunnies” — populate the surrounding fields and trails. A small creek filled with trout runs through the property. Eddie Bauer’s heritage is in goose-down jackets, fishing rods and hip waders. But today’s Eddie Bauer is different — it sports a trendy, more fashionable Northwest look. Casual wear with a touch of Madison Avenue. Home- furnishings stores. Women’s specialty apparel. This on top of the traditional outdoor wear, sports shops, even sport—utility vehicles with the Eddie Bauer name. . Company president Rick Fersch admits that Eddie Bauer has strayed from its outdoor- lifestyle roots a bit, although it has not abandoned them. The changes are attributed by many to the company that became Eddie Bauer’s parent in 1988, suburban Chicago-based Spiegd Inc., a catalog giant and mass marketer. But the result has been a rapidly growing, extremely successful Eddie Bauer, now as well known in New York and Tokyo as in Aberdeen and Cle Elum. In 1993 it topped $1 billion In sales for the first time ever. While other retailers have been staggering, Eddie Bauer is thriving under the moral and financial backing it gets from Spiegel. “It’s been a wild ride,” Fersch said of the past year, his first as the company’s top executive (he was promoted to president last June). “If you think that’s exciting, you haven’t seen anything yet.” THE AGENDA for 1994 is indeed ambitious. Eddie Bauer, which added some 30 new storesxlast yearto finish at 294 in the United States and Canada, will open 60 more in 1994 and possibly another 60 the 1,000 employees work there, out of a' total work force that varies seasonally from 7,000 to 12,000. “We looked at Bothell and ‘ Issaquah (to build new offices),” Fersch said, “but this is a place we never really wanted to leave.” SPIEGEL PURCHASED Eddie Bauer from General Mills, the food conglomerate, for $261 million in 1988. Eddie Bauer then had 45 stores and about $170 million in annual sales. At the time, many worried that Spiegel might ruin the local company with its big-city ideas. But Spiegel has broadened Eddie Bauer’s outdoor-wear niche, emphasizing summer clothes as well as winter ones. It also has provided Eddie Bauer with valuable market data on what’s trendy, what’s selling and what’s not. “Their alignment with Spiegel has given them an incredible shot in the arm,” said Anne Erickson, marketing director for The Retail yGroup, a Seattle consultant. “It has given financial strength and a lot of consumer-sampling Information from the catalogs on what America is buying. “This has influenced what Eddie Bauer manufactures and buys.” Nationally, Eddie Bauer denim shirts and jeans and other clothing have become chic for young adults, said Walter Loeb, a retail analyst in New York. “Right now they are the store of choice for the 17-to—34 crowd,” he said. “Young people are coming to Eddie Bauer instead of The Limited or The Gap.” Eddie Bauer finished 1993 with $1.15 billion in sales, nearly 30 percent better than 1992, according to one analyst’s estimates. That included $800 million from stores and $350 million in catalog sales. Its sales for stores open at least a year a telltale statistic in retailing —— were up a strong 11 percent from January to January, according to Spiegel. In 1994, Eddie Bauer is expected to generate sales of more than $1.3 billion — $900 million-plus from stores and $400 million from catalogs, according to a New York-based analyst at . First Manhattan, who asked not , tobe'identifibd‘. v ~ Spiegel’s Sales were estimated ” at $2.4 billion in 1993, and giye‘thanks for his faihilyfiand his hflit}?BUSINESS Eddie Bauer’s ’wil rid’ Gauery, frame Rck Schweinhart Rick Fersch, president of Eddie Bauer, said the company plans to open 60 more store in 1994. Eddie Bauer topped $1 billion in sales in 1993, at a time when sales for other retailers have been stagnant. re-positioning the (Eddie Bauer) company. It did what needed to be done at Bauer.” Debbie Koopman, spokeswoman for Spiegel Inc., said both companies are benefiting from the 1988 acquisition. She said Spiegel has learned from Eddie Bauer’s expertise in manufacturing and retailing, just as it has provided it with catalog and marketing help and a proprietary credit—card program. “It’s been totally a team effort to accomplish what has been accomplish,” Koopman said. “It’s been a two-way street.” LIKELY GIVEN less credit than he deserves is the 44—year-old Fersch, a Mercer Island resident who said he attends Massat St. 5‘ Monica’s Churchevery dayto job. Fersch is hyperactive, intense, After 16 years with May 00., he joined Eddie Bauer as vice president of stores in 1988, the day it was purchased by Spiegel. He later served as executive vice president of merchandising, marketing and advertising, before becoming president and chief operating officer last June. He replaced Wayne Badovinus, who left the company for personal reasons in July 1992. Though he keeps a low profile, Fersch said he is allowed by Spiegel president and chief executive John Shea to run his own ship. “He totally allows the company to run itself,” Fersch said. “He doesn’t believe in putting all his companies together under one umbrella. He knows Eddie Bauer is not Spiegel.” “It’s‘like afamily’environment WehaveihereiEVerything'is? informal in dress and name. People call me ‘Rick’ and not ‘Mr. Fersch.’ It’s wonderfully shop to By Laurie McHale Mercer Island Reporter wo mainstays of the Mercer Island business district are in the process of closing their doors: Davidson Galleries, and the adjoining Frame Design. The businesses have been housed for many years in the low brown building across the street from Albertson’s. While Barbara Davidson plans to close her gallery, she will continue publishing cata- logues of original prints and lith- ographs with her son Sam, own~ er of Davidson Galleries in Pio- neer Square. She will also con- tinue to do some consulting and art appraisals from her home. With the death of her hus- band, Dr. Sam Davidson, last Sep mber, and with her own heal h challenges, Davidson said she needs to reduce her work load and make time for travel, music, gardening and grandchildren. Since 85 percent of her business is with clients outside the area, she will be able to stay as busy as she chooses. Davidson and two of her four children, Sam and Michael, bought the frame shop in the early "[03. The former owner taught Michael the business of fine framing, while Barbara and Sam concentrated on establish- ing a gallery. With a back- ground in art history and a mas- ter’s degree in English, David- son had been teaching English at the University of Washington while working on a doctorate. But she gave up academia to \. gm“! Wednesday. March 9. 1994 Close buy the business with her sorgg and has since garnered a nations; a1 reputation as a collector. " '- “Michael had a marvelous knack for framing, a wonderful eye and manual skills,” Barbee ra remembers. “Sam and I did the buying. It was I who went abroad on buying trips, because he had a wife and young family. We even took the collection on tour.” She has frequently put to- gether teaching shop/sat univeri sities around the country. MARY CHALKER, proprie- tor of Frame Design, said in a letter to her customers that she intends to accept orders through the end of March, and then re? tire to be a full~time mother to her two young daughters. She. has been working alone since’ her assistant, Melinda Bonaci,~ became a mother in January. ,3; Chalker began working for- Davidson Galleries in 1977, be- coming a business partner in frame business with Michael Davidson a couple of years later and purchasing the business out: right in the mid 1980s. The shtop has a long-established repu‘ é‘ ‘ tion for museum-quality fram- mg_ a» It: The good news for Chalker’s customers is that she will take her tools with her and will also continue to do some work out of”. her home. if Davidson said the adjoining Salon Santa Fe will expand intd, her gallery space. The adjoining- buildings are owned by the Bitney Insurance agency, which has an office around the corner: Expo is for home business A Home-Based Business Expo will take place from 9 am. to 3 p.m. on Wednesday, March 23, at the 'upper campus of Bellevue Community College. The expo, a collaboration between BCC and the Home-Based Business Round- table sponsored by the Mercer Is— land Chamber of Commerce, is for people thinking about starting a home-based business or wanting to improve the one they have. There will be free business consultations with Small Business Administration SCORE retired eXecutives and Small Business Development Center consultants, as well as exhibits by successful home-based business owners and The fee for the expo is $45. Call BCC Continuing Education, ~‘ 641-2263, for registration informs; tion. The exhibitor fee is $60; out; Charlie Barb, 236-1990, for exhib‘h tor information. ’ SPORTS CARD COMIC SUPERSHOW TOTEM LAKE MALL" Exit 203 East oft, H05, Kirkland: Saturday, March 12 10 am—6 pm Sunday, March 13 11 rim-5 pm , projected at $2.8 billion this year. Spiegel has less than 25 of its own retail stores — most of its revenues from Eddie Bauer and from its own catalog sales. “(Eddie Bauer) as a chain is averaging $480 (in sales) per square foot,” said the New York analyst. “That places it up there with The Gap. It’s a superior performance for a specialty retailer.” The average apparel retailer .last year averaged $245 per square foot of store space, said the analyst. “Spiegel management is really top notch,” he said. “It’s done a great job of hunkering down and and sports the casual look — cotton shirt and slacks, no tie -— on the job. He is a New Jersey native and a magna cum laude graduate of Villanova University, but his first job in retailing was a summer job selling shoes at the Bellevue Square NordstrOm store. OVER BO‘DEALEIIS with spam suds. comics, milk up: I: Hon! “ FREE ADMISSION '1 l following year. It expands into Japan in September, opening three stores in the Tokyo area and also ,. distributing a 100.page catalog in . that country. “Our intention is to literally bring Bauer to Japan, just like you see it at Bellevue Square,” Fersch said. It will launch a 100-page catalog in Germany, home of Spiegel parent Otto-Versand, to determine whether to pursue an expansion into that country in future years. Eddie Bauer’s foray into TV home-shopping will be tested in selected U.S. markets, beginning this spring. The tests, under a liberating to have such an informal atmosphere, to not have a tie around my neck. “I don’t know why I’m lucky enough to have this job,” he said. . “I'm very fortunate. This ’ * :w- : BOATS & CARS COMING OUT businesses. BCC instructors will give classroom presentations ‘ throughout the day. I Our Transmisslon Experts will: ' Remove Pan 0 Adjust bands (where applicable) I - Check transmissio? filler (most carsld clean I transmission mounts 0 Check to: leaks - Check screen (fillet extra - Check motor and .. ... cm L. dun, u... ,.,. Slug/W“ joint venture between Spiegel and Time Warner, will include programming on a home- shOPPing network called Catalog 1 as well as interactive-TV sales. The test markets will not include the Puget Sound area. Eddie Bauer’s profitable but cramped Bellevue Square main store will be expanded by 1.500 square feet. The expansion to nearly 10.000 square feet will include a Eddie Bauer Sport Shop, which sells fishing gear and other sports equipment. It has a. similar shop in downtown Seattle. (Just last August at Bellevue Square, Eddie Bauer opened two of its newer concept stores, All Week Long and Ijlome Collection.) Construction 1S expected to begin this fall on new Eddie Bauer corporate offices, to consolidate operations that are now spread over 10 buildings in Redmond and Bellevue. The new headquarters, now in the design stage, will be on the same 13-acre site off 148th Avenue NE. where Eddie Bauer has most of its current buildings. About a CAMP g June19-24 “W‘ , COMPLETELY TAUGHI‘ BY THE UNI. m COACHING STAFF WITH SPECIAL” APPEARANCES av amuse! mos. FREE T-smm‘ l snows o WEIGHT TRAINING I msmucnou s cusses . 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