Eddie Bauer declares bankruptcy
cbsnews.com
cbsnews.com
"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!"
> 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.
Going on shopping sprees and then calling the credit card company to report it as fraud...
Buying a fancy dress to wear for a few nights out and then returning it...
All things people close to me have done, or continue to do on a regular basis
Talking about a relatively "privileged" class of people here- multiple homes, multiple cars, kids in private school- not struggling single moms working double shifts to put food on the table.
Something's broken in our society.
But some of your examples are actually committing crimes, the first two in particular - especially that second.
(Jacket zipper just broke and the buttons that held the inside insulation of a jacket came off, shoe sole issues).
I still use daily the Timberland backpack I got in 2009. Again, some wear and tear (actually just wear, thankfully no tears) but works great at the 17 year mark, even though it has gone through anything from daily use to travel to trekking.
Other backpacks have come and gone when I thought it'd need replacing, but kept trudging on. Now I don't want to have to let go of it, even though it looks "a bit" old.
I know it's not good for business to have long-lasting products. But some items like this backpack, a 2008 Fujitsu workstation, or a 2013 MacBook Air (not to mention the Faber Castell TK 4600) that simply keep on working become something akin to lifelong companion tools.
It goes to show the benefits of deep forethought and good design. And, I guess, the stubbornness of some users :)
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.
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)
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.
The problem is that PE also has a nasty habit of coming into a business that is marginally profitable but not spectacularly so, saddling it with giant amount of debt to vacuum up the cash flow, and killing the business.
There is nothing wrong with a sustainably profitable business. Investors, however, want returns from the lottery ticket that they fund.
Who are these lenders, and why are they so bad at their job that even random commenters online know the folly of their business?
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.
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.
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.
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.
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 bankruptcy doesn't affect Eddie Bauer stores in markets outside the U.S. and Canada.
So its physical US locations declared bankruptcy.
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.
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.
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.
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.
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.
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.
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.
We also have "open-air malls" called shotengai, which are basically shopping streets but typically with a roof installed overhead. A lot of these aren't doing so well though.
Another comment mentioned logistics in America as being very good, but they're better here. Stuff gets shipped across the country very cheaply in 2 days here, or within the metro area in a day. You can even send frozen stuff to your relatives quite cheaply. The country's small size and urban density probably has something to do with this. But in-person shopping still is doing a lot better here than in America. Personally, I think a few factors contribute: 1) homes (esp. in the city) are quite small, so people like having 3rd spaces, and malls serve this purpose (as well as shopping streets and the city in general, but when the weather is bad, people understandably don't want to wander around outside that much). In America, people can stay in their homes more easily. 2) Civility in Japan is probably best in the world, whereas in America it's really gone down the toilet. Lots of Americans I've read about dread going outside because there's so much rudeness and incivility with daily interactions with strangers, when driving, etc. Whereas in a large Japanese city, you can take the subway somewhere, go shopping, go to a restaurant, etc., and it's extremely unlikely you'll have a highly negative experience with some angry karen or MAGA-head. Even going to a cafe, restaurant, etc., you can always expect polite service, whereas in America these days, rude service seems to have become the norm. So with such a negative environment outside their doors, it makes sense that Americans wouldn't want to even go to the mall just to walk around.
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.
Makes me want to have some Patagonia stuff altered on principle...
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.
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.