Summary of the case: (Nau) In 2005, some experienced men in the outdoor clothing industry gathered to draw their new trailing concept. They agreed to be unique through combining stylishness, to cope with the new trends of fashion, and at the same time the durability of the mountain-climbing apparel of the Patagonia – a clothing company focusing on high-end clothing. It was approved to name the company Nau. Also, the firm would design its fabrics with new sorts of eco-friendly materials. One of the good ideas was to donate 5 percent of sales to charity organizations that buyers would choose. As for the management staff of the firm, it would be as follows; Chris Van Dyke as the firm’s CEO, Ian Yolles as the marketing chief, and Mark Galbraith as the lead designer. To launch successfully, the founders began their green and humanitarian movement and kept in mind that they needed to run a good business, so they determined their shops to be rather small with tiny inventories representing a huge cost savings. Moreover, Nau offered 10 percent discount for shipping clothes from its warehouse directly to shoppers’ homes. According to the founders’ vision, they tried to balance the triple bottom line: people, planet, and profit. They wanted not only to be successful businessmen, but successful humanitarians’ as well. Their goal was to show the highest level of citizenship in every aspect in their work and relations. An example of mixing profitability and humanitarian, the company bylaws prohibited any Nau’s executive from earning 12 times what the lowest-paid U S worker earned. The philosophy design was based on three criteria: beauty, performance, and sustainability. The founders believed that these three elements define a new standard for apparel making. The Nau team continued and expanded their firm as they invested in an IT infra-structure to handle $ 250 million in annual revenue and striking deals with fabric makers in U. S, Hong Kong, and elsewhere in Asia. To cope with that growth, the management raised $ 350 million from private inventors. Unfortunately, troubles began to strike the company as it was growing. On May 2, 2008 an announcement read “Goodbye for Nau” declared that the company would be shutdown. The management blamed that failure on “highly risk-averse” capital market. As a result, the investors refused to invest more money in the Nau’s business.

At that point the board realized that they couldn’t pare Nau again, so they voted to close down the Nau stores and suspend all the business. The management of Nau; Yolles and Galbraith couldn’t imagine life after Nau as they poured all their money and effort in it. They lamented their luck saying that if they had had one more season, they would have gotten traction. On one hand, Van Dyke had a plan to re-launch Nau. He was like Yolles and Galbraith wanted Nau to remain committed to seeing the Nau’s brand and the values it represented continue. He organized a buyout effort to acquire the Nau’s brand and its website. On the other hand, Yolles and Galbraith called up factories to hang on to give an opportunity to the resurrection of Nau. The team of the founders realized that they have to change Nau’s business plan as they were so idealistic. They decided to slowly and organically instead of increasing their stores number. Yolles and Galbraith succeeded in organizing a visit to Nau’s headquarter by Gordon Seabury – the CEO of Horny Toad, a large casual clothing line in Santa Barbara, California. After the visit, Seabury offered to purchase Nau Seabury liked what he saw. He offered to purchase Nau, trumping Van Dyke's bid and several other bids. Seabury also agreed to hire Yolles and Galbraith, who would continue in their same positions. Currently, Nau's line shares Horny Toad's distribution network and is being sold in such stores as Uncle Dan's in Chicago and Paragon in New York. The answers for the questions (1 – 8) 1) Nau’s primary motivations were: a) Producing not only practical apparel, but glossy and stylish as well. b) Using eco-friendly materials in apparel and even in their retail outlets (stores) that would be constructed from recycled wood and plastic. c) Supporting charity organizations. 2) Nau is a firm that sells expensive outdoor-type clothing with the added incentive of style and a donation to charities. Nau also uses eco-friendly fabrics in its products. 3) In my view point the decision was so idealistic as we can’t begin a business with such a burden neither on the company nor on the shoppers. To begin such a humanitarian movement the company should have begun that after making sure the firm was leading a kind of success. In other words, it was not the appropriate time. As for the positive point in that decision, I think the founders wanted to benefit from both humanitarianism side and the propaganda one.

4) First of all, Patagonia has focused on helping the environment since its creation in 1972Patagonia’s mission statement includes a portion about helping the environment and reducing toxic impact: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. Patagonia donates 1% of sales to environmental groups every year. Prada also started with two botiques then led a success through Europe and U S. Prada is specialized in leather clothes which are considered eco-friendly material. 5) Nau tried to be unique through: a) Combining stylishness, and at the same time the durability of the mountainclimbing apparel of the Patagonia. b) Designing its fabrics with new sorts of eco-friendly materials. 6) First: they had a good which was built on the balance of three criteria: beauty, performance, and sustainability. Second: they embodied Nau's uniqueness through prohibiting any Nau’s executive from earning more than 12 times what the lowest-paid U.S. worker earned. Third: the management was a risk-taker as they raised $ 350 million from private inventors to expand the business. 7) a) They had been too idealistic and too ambitious. b) ramping up the stores was a fatal mistake. They should have been concerned about expand their business slowly and organically instead of increasing their stores number. c) they had overextended themselves by offering too many styles. 8) I think it was a good decision as Toad and Nau had things in common which was that they were supporting both the community and organizations. By purchasing Nau’s assets and hiring its leadership to help re-launch the clothing line, would support its motto “do well by doing good” and at the same time they will share the goal, profit, and the Nau’s name that would continue in the apparel market.