Hi All,

Thanks, Pax, for dropping me a note and asking me to chime in.

There are many many ways I could answer the questions all of you have posted above. The natural tendency for a business person is to answer to questions like this in the most positive light, but I'd be lying to you if I did that. The truth of the matter is that not all is rainbows and sunshine these days, so I'll just give it to you straight.

TE has been around for just shy of 18 years. (I like to joke that I have a lot more gray hair now than at 28 and that Jeff just had a lot more hair then period. ;-) ) But the past 3-4 years we have seen a sea change in retail. It's become ever harder to be a small business online. And we are small. At our peak, we had 11 people, myself and Jeff included. We did a fair amount of business with 11 folks, but we were nonetheless still a pretty small company.

Once upon a time we thrived because of all the reasons you mention above. Huge selection (over 100 brands), great customer service, selections in swim, bike, run, etc. But the industry has changed and quite frankly, consumer expectations have changed. As a small company, we simply can NOT do what the big companies do. (Most) consumers want discounts all the time (and there's no shortage of discounters online), they want free shipping and they want it delivered tomorrow. They want to wear it and then return it and still get their money back. They want customer service people to be available 24/7 and they want them to know everything there is to know about the product.

But as a small company, we simply can't give discounts everyday to everyone, give fast free shipping, provide free returns, accept for return apparel that has been worn (which vendors won't take back from us) AND still afford to pay for all those excellent staff people to be here and be knowledgeable and still turn a profit. And as unpopular as it may be in today's world to say so, I'm not running a business to lose money. I simply can't. I need to make a living too, and all those forces mentioned above have made it ever more difficult to do that.

Big companies like Amazon (or REI or Performance) and the discounters like Left Lane and The Clymb, have squeezed companies like ours ever more tightly, and quite frankly, most of our vendors have facilitated that to some extent. Our vendors want huge preseason commitments from us, but then go to closeout to the big guys only half way through the season. Discounting is rampant and few vendors are doing a good job enforcing MAP (minimum advertised price) Our own vendors sell direct to consumer and offer all sorts of incentives, which they can do because they have the gross margin that we don't. Amazon is a scourge, and has trained consumers to only pay attention to price. Amazon and the rest get ginormous discounts from Fedex and UPS and heck, Amazon practically owns the postal service at this point. All that fast free shipping they offer costs them way less than it costs for a small company like TE. We can't compete with that.

Every item we sold resided in our warehouse. My staff was fantastic. Everything was checked to make sure that all the product features were accurately described on the website (you'd be *amazed* at how much product data is simply wrong on Amazon), we did nearly all our own photography, you could call in and talk to Renata or Edna or any of the other gals and they would grab product from the warehouse and measure anything you wanted, from sleeve length to leg gripper. Amazon doesn't do that. Performance certainly doesn't. But in the end, it didn't seem to matter how awesome my staff was, how wide our selection was, or how much we knew about what we sold. Without the discounts and the free shipping and all the rest, customers started going away, and in the last year or so, that trend really accelerated.

It's a really difficult (and somewhat depressing) thing for a business owner to watch what they have built over 16-17-18 years wither away. So many years of hard work. But the truth is, at some point, you have to adapt or die. What we could not do was to continue to do what we'd always done, because that wasn't working anymore.

In those circumstances, a business owner has three choices.
1) Sell
2) Shut it down
3) Do something different

Selling into a down market is really hard. A company with declining revenues, in an industry that is seeing shops close all over the country, and participant numbers falling... well, you can imagine that buyers were not beating down our doors for the opportunity. The offers we did get were unacceptable. (Both in dollars, and if I'm being totally honest, to my ego.)

Shutting it down was a very real possibility, and we came really really close to going down that path. REALLY CLOSE. But it's hard to do something for as long as we have and just let it all go, to just walk away. It feels like admitting defeat.

So, in the end, we took a hard look at what we do well, what sells well, where we can compete, and perhaps most importantly, what we ENJOY doing. (cuz if it ain't fun anymore, then what the heck is the point?)

We came to the conclusion that we simply can no longer sell what everyone else is selling because there is not enough margin in it for us to survive. So, we have shrunk our business way down. We are concentrating on bottoms from the best brands, and the styles that are the ones that 80%of our customers were buying anyway. These products are the best; they fit well, the return rates are low, and our vendors support them with good availability. We also have excellent relationships with them, and they work hard to combat rampant discounting so that their retailers can survive.

As for tops, we decided to concentrate in just a few area: exclusive prints from a small number of vendors, and our own new brand, called Doyenne. http://doyenne.com/ Doyenne is our brainchild, and it's where Jeff and I can find the fun again. We love designing these prints, and we get to do them in regular AND plus sizes. And again, in the interest of being straight up with all of you, selling our own brand means we do not have to compete with discounters all over the internet. The designs are ours, and if you want to buy them you have to buy them from us. We hope our customers will find them fun and interesting, and will support the new endeavor.

Lastly, we are maintaining our strong focus on plus sizes. Plus has always been an important part of our business, and this customer is underserved. We want to do an outstanding job here, so we are carrying as much in-line from our vendors as we can (Shebeest, Canari) as well as producing our own via Doyenne.

So, that's where we stand. We are a much smaller company with a much more tightly focused line (We do have more product coming in March and April, but nothing near to the breadth we used to have). We've moved our office, relaunched a new website (getting us away from maintaining all of our own servers), and will be utilizing 3rd party warehousing for fast shipping and to try to bring down our shipping costs so that we can offer every day free shipping (no minimums now!). This next year will be telling. Either enough folks will find what we are offering compelling...or they won't.

I sincerely hope that some of you will still find something of value here at TE. But we certainly understand that many of you will go elsewhere. Please know that Jeff and I are grateful beyond words for the love and support you ladies have shown us over the years. I'm truly sorry we can't be what we always were anymore. I have shed my share of tears over this, but for me, and for TE, it's time for us to start a new chapter.

Love to you all,

Susan