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Originally published Friday, July 18, 2008 at 12:00 AM

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Retail Report

Cutter & Buck tries again with organic cotton line

The Seattle-based sportswear company hopes the second time's the charm for a new line of men's and women's shirts made of organic cotton.

Seattle Times business reporters

What a difference three years makes.

In 2005, Seattle sportswear company Cutter & Buck introduced organic cotton shirts with a hang tag detailing its commitment to environmental sustainability — and a retail price $4 to $5 above regular cotton shirts.

The market's response? "Disappointing," says Cutter CEO Ernie Johnson. "We probably were a little ahead of market demand at the time."

Now, Cutter is giving organic cotton another chance in the firm belief that consumer interest has come a long way since 2005.

The company's sales force began showing a new line of organic cotton shirts last month to retailers throughout the U.S., and this time, says vice president of sales Brian Thompson, the reaction has been "very positive."

The new line includes several styles of shirts for men and women in colors ranging from a reddish orange, called "alarm," to "score" blue.

The shirts are made in India with organic cotton, meaning the crop was grown without pesticides or synthetic fertilizers. They're expected to hit stores in late November at prices slightly above those for conventional cotton shirts.

But for all the environmental awareness these days, a more expensive offering could be a tough sale if the economy continues to deteriorate and consumers don't get some relief from rising food and gas costs.

Johnson acknowledges that Cutter will "have to be very patient and basically work a little harder."

"Will this be the top seller? I think it will take some time," he says. "But I think there will be a wider audience than three years ago."

Thompson says there's another reason the new shirts could be more successful: They're more fashion-forward than the basic polo-style shirts of three years ago.

"I'll sell a lot of this to people who don't care that it's organic," he says, pointing to a display of shirts featuring accent stitching, striped patterns and three-quarter-length sleeves. "The fact that it's organic could be the deciding factor for some. For others, it will just be a nice attribute."

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Founded in 1990, Cutter was bought last year by New Wave Group AB, a European sportswear distributor, for $156.5 million.

A leader in the U.S. corporate promotional-apparel market, Cutter sells sportswear to distributors that brand it for companies.

It also designs and markets upscale sportswear under the labels Cutter & Buck, Annika and CBUK. It employs about 380 at its headquarters in Fremont and at a Renton distribution center.

For now, organic cotton represents a small portion of its business, but Thompson says he's hopeful it will become a bigger part, especially as supplies increase and costs come down.

"I think the concept is here to stay because it's a sound business practice," he says. "It's just that we're in a transition period where it's more expensive."

— Amy Martinez

Tidbits

AMC Entertainment's new 16-screen movie theater at Westfield Southcenter in Tukwila opens today. Customers will receive a free small bag of popcorn with each ticket purchased through Thursday.

The theater is part of a major mall expansion set to open July 25. Next Friday, AMC will give a year's worth of free movie tickets to the first 100 people who appear at a noon event dressed as a celebrity or movie character. — AM

Tully's Coffee delayed this week for the second time the filing of its 10-K, an annual report required by securities regulators. In both delay notifications, on June 30 and July 16, Tully's said it could not gather the information necessary for the filing in time "without unreasonable effort and expense." The company has not said when it might file the 10-K. Tully's said in February that it had hired the investment firm D.A. Davidson to "explore strategic and financial alternatives," a move that many took to mean that Tully's was for sale. — MA

Piper Jaffray downgraded Starbucks on Thursday from buy to neutral, citing the company's "slower growth rate, lack of positive investment catalyst and lack of share price appreciation." Shares rose 5 cents to $14.39. — MA

Gene Juarez Salons & Spas opens Monday at Seattle's University Village. The 8,500-square-foot salon and spa next to Crate & Barrel will be the company's ninth overall and third flagship, joining the ranks of its downtown Seattle and Bellevue locations. — AM

Teatro ZinZanni returns to downtown Seattle's Pacific Place next month to present "Aerial Antics in the Atrium." Aerialist Eric Newton, diabolo juggling artist Trevor Nassler and German clown Manuela Horn will perform for the public for free at 6 p.m. every Thursday through Sunday from Aug. 7 through the 31st in the Pacific Place atrium. — AM

RestaurantsToGo, a Seattle restaurant delivery service, has changed its name to Restaurants on the Run after being acquired by that California company. That company now delivers food from more than 900 restaurants along the West Coast and in Las Vegas. — MA

Glassybaby, a Seattle maker of small colored glass cups, will keep a temporary storefront at University Village until mid-January. Glassybaby opened at University Village in April with plans to stay there until the end of last month. The company also sells online at www.glassybaby.com and at a studio in Madrona. — AM

Furniture retailer Ikea says its new distribution center near Tacoma will become fully operational Sept. 17. The 834,000-square-foot center represents the first phase of a project that eventually could top 1 million square feet and create about 125 jobs. The center will provide the primary inventory for Ikea stores in Renton, Portland and Draper, Utah, as well as four stores in western Canada. — AM

BJ's Restaurant & Brewhouse opens July 25 at Westfield Southcenter in Tukwila. It will be the 77th location and the first in Washington for the Southern California-based chain. BJ's menu includes deep-dish pizzas, salads, sandwiches, soups, pasta and ribs. — MA

Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com.

Copyright © 2008 The Seattle Times Company

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About Retail Report
Retail Report is a look at the trends, issues and people who makeup the dynamic and versatile retail sector throughout the Puget Sound region. Every Friday with Melissa Allison and Amy Martinez. Send tips or comments to mallison@seattletimes.com or amartinez@seattletimes.com.

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