Eddie Bauer

2460 Words Mar 7th, 2011 10 Pages
Core problems
There are several issues for Eddie Bauer, Inc. to tackle, low profit margin ratio, high sales return and high inventory level, and brand positioning.

Analysis of the problems
Eddie Bauer yielded the lowest net income among its competitors like The Gap, A & F and Land’s End. It achieved similar gross profit margin but got a poor performance on overall net income at 1% because it suffered from high expenditure on SG&A in both retail and catalog operations which accounted for 37% of its total net sales. This is extraordinary high while compared with its main competitors like A & F, and the Gap whose SG&A amounted to 22% and 27% of their net sales respectively (Table 1). A & F and Eddie Bauer are similar in size,
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We could put more women’s items setup in window display at the entrance of each store. If the same products are available in all channels, customer can shop at the stores with all sizes, style and color, and the estimated sales will increase in retails. In addition to the promotion of women’s items at shop such as shoes, swimwear and dress would widen the choices for the customer. They could offer crossover brand name products and sponsor the qualified and famous explorers, athletes and celebrities to attract the customer’s attention and boost up more sales.
Combined with both advertising and more items available in retail, the sales is forecast to increase at 5% for the 1st year at $27M (Table 9) since brand building is a long term strategy and we cannot expect miracles only after several campaigns. On I-media, Eddie Bauer should implement more promotion campaigns and new-items launch date. It should gradually shift more information from catalog to I-Media since its cost of developing selling information is lower than printing content for catalog. Both professional and higher quality elements should be added to the I-Media since 50% of I-media customers are affluent male who are looking for quality to fit their life style. To increase the brand synergy, more women’s items or feminine visuals could be added on the front page

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