The Retail segment consists of the aggregation of the Company’s five brands operating through stores under the retail names Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn and includes their direct-to-consumer channels. The Company’s retail stores offer collections of fashion apparel, accessories and home goods. In addition to retail stores, Urban Outfitters offers its products and markets its brands directly to the consumer through e-commerce websites, mobile applications and also through the Urban Outfitters, Anthropologie and Free People catalogs.
Urban Outfitters targets young adults aged 18 to 30 with product offering, including women’s and men’s fashion apparel, footwear, beauty, accessories and sporting apparel and gear, as well as a range of apartment wares and gifts.Urban Outfitters has been described as hipster, stylish, kitschy, catlike, bohemian and bizarre merchandise, for example, T-shirts emblazoned with the words “Jive Turkey” or “Atari”. They are known for catering to “hipster” culture and fashion, which incorporates an influence from past decades. As of January 31, 2014, the Company operated 230 Urban Outfitters stores of which 176 were located in the United States, 14 were located in Canada and 40 were located in Europe.
Urban Outfitters says, “we stock our stores with what we love, calling on our — and our customer’s — interest in contemporary art, music and fashion. From men’s & women’s apparel and accessories to items for the apartment, we offer a lifestyle-specific shopping experience for the educated, urban-minded individual in the 18 to 30 year-old range — both online and in our stores as well as through our catalog”.
Urban Outfitters
Anthropologie tailors its merchandise to sophisticated and contemporary women aged 28 to 45. Anthropologie’s product assortment includes women’s casual apparel and accessories, shoes, home furnishings and a diverse array of gifts and decorative items. As of January 31, 2014, the Company operated 187 Anthropologie stores, of which 174 were located in the United States, nine were located in Canada and four were located in Europe.
Anthropologie says, “it is a lifestyle brand that imparts a sense of beauty, optimism and discovery to our customer. For her, Anthropologie is an escape from the everyday; it is a source of inspiration and delight, where innovative merchandising, customer centricity and a curated array of products come together to create an unimagined experience. Anthropologie products are an expression of our customer’s appreciation for artfulness and good design. To that end, our buyers and designers travel the world to uncover special products and to collaborate with talented artisans. Our assortment includes clothing, accessories, shoes, beauty, home furnishings, found objects, gifts and décor that exhibit influences ranging from vintage to global”.
Anthropologie
Free People primarily offers private label branded merchandise targeted to young contemporary women aged 25 to 30. Free People provides a mix of casual women’s apparel, intimates, shoes, accessories and gifts. As of January 31, 2014, Urban Outfitters operated 90 Free People stores, of which 88 were located in the United States and two were located in Canada.
In addition, they produce a direct-to-consumer catalog and website, providing an inspiring shopping experience for the carefree, confident and curious young woman who appreciates our distinctive assortment of apparel, accessories and housewares.
Free People
The company’s Terrain garden centers offer lifestyle home and garden products combined with antiques, live plants, flowers, wellness products and accessories. Terrain also offers a variety of landscape and design services. As of January 31, 2014, the Company operated two Terrain garden centers and a website that offers customers a portion of the product assortment found at the Terrain garden centers.
Terrain
Bhldn offers a curated collection of heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie and decorations. As of January 31, 2014, Urban Outfitters operated two Bhldn stores and a website that offers customers access to all product offerings of the Bhldn brand. The Company also operates shop-within-shop locations within its Anthropologie stores that offer a comparable product assortment to its standalone stores and website.
Bhldn
Wholesale Segment
The Free People wholesale division designs, develops and markets young women’s contemporary casual apparel. Free People’s range of tops, bottoms, sweaters and dresses are sold through approximately 1,400 department and specialty stores across the world, including Macy’s, Nordstrom, Bloomingdale’s, Lord & Taylor, Selfridges, its own Free People stores, and in Japan through an exclusive distribution and marketing agreement with World Co., Ltd.
In house brands include Kimchi Blue, BDG (Bulldog), Pins & Needles, Sparkle & Fade, Silence + Noise, Coincidence & Chance, Deena & Ozzy, Ecote and Staring at Stars.
Strengths
According to their website, Urban Outfitters’ “established ability to understand our customers and connect with them on an emotional level is the reason for our success.” Urban Outfitters seeks to create “a differential shopping experience, which creates an emotional bond with the 18 to 30 year old target customer we serve.
Urban Outfitters offers an alternative vision of retail. Its customers choose it for daring to offer something authentically different. With a creative, individual and progressive voice, Urban Outfitters champions youth culture and new ideas.
Urban Outfitters has organized retail store operations by brand into geographic areas or districts that each have a district manager. District managers are responsible for several stores and monitor and supervise individual store managers. Each store manager is responsible for overseeing the daily operations of one of our stores. In addition to a store manager, the staff of a typical Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn store includes a combination of some or all of the following positions: a visual manager, several department managers and full and part-time sales and visual staff. The staff of a typical Anthropologie store may also include a customer care manager who helps tailor the shopping experience to the needs of Anthropologie’s target customers. A Terrain garden center may also include merchandise care and maintenance staff. The staff of a Bhldn store also includes a product, bridal and event manager, appointment stylist and a category specialist.
An essential requirement for the success of their stores is our ability to attract, train and retain talented, highly motivated store managers, visual managers and other key employees. In addition to management training programs for both newly hired and existing employees, they have a number of retention programs that offer qualitative and quantitative performance-based incentives to district-level managers, store-level managers and full-time sales associates.
Weaknesses
On a macroeconomic basis, apparel retailers are heavily affected by unemployment rates, consumer confidence, and payroll trends. Urban Outfitters is no exception to this rule. Additionally, Urban competes in a very crowded teen and young adult retail space with large competitors including Gap, J. Crew, Zara, H&M, Forever 21, and Abercrombie & Fitch. With no barriers to entry, this competitive landscape has the potential to get even more crowded. E-commerce shifts are likely to be very pronounced in Urban’s target market of young, sophisticated shoppers, and the company’s success may be tied to how well it does creating an omnichannel experience.
Lastly, the single most important determinant of success is getting product right. Given Urban’s eclectic, high-fashion merchandise, this can be difficult to achieve.
Planned Improvements
Urban Outfitters is elevating its creative functions and restructuring new procedures and communication, into a more central role in order to reconnect with its core customers. Urban Outfitters introduced a new concept named “Without Walls”, which aims to attract young customers with active lifestyle products, placed in an enthralling environment. The concept was recently launched in five stores, where it received tremendous customer response. The retailer is now planning to open three to six such store-in-store locations in fiscal 2015.
without walls
Additionally, the company made significant strides towards the improvement of its supply chain system during the year, which should assist Urban Outfitters’ revival. The retailer lowered its weeks of supply by one week and reduced its lead times by more than 10%. This should help it better adjust to the changing customer preferences. It also reduced direct-to-consumer orders fulfilling time by 30% and shipping time by over 15%, to improve the customer service. These efforts along with an improvement in design should help the brand’s steady recovery going forward.
Urban Outfitters 