Urban Outfitters Plans Global Expansion And Reports Record Profits
By Jennifer Lynn, contributing writer
Growth initiatives will include expanding the retail landscape to continue strengthening company revenues.
Urban Outfitters, including brands Free People and Anthropologie, reported record third quarter revenues and operating profits. The retailer reports profit increased by 18 percent and is planning global expansion of its stores. Urban Outfitters revenues increased by 12 percent for the quarter, resulting in a third quarter record of $774 million. The increase resulted from a comparable store sales increase of 7 percent. The company also opened 9 new stores during third quarter and renewed its focus on strengthening omni-channel initiatives.
The retailer’s primary growth initiatives will include expanding its retail landscape by opening new stores throughout North America, Europe, and Asia. The company opened 7 new stores during the quarter, bringing the total to 22 new stores for the year. Free People, in partnership with World Co., Ltd. of Japan, also opened 2 new Free People stores in Japan. The company expects global expansion efforts to strengthen Free People’s wholesale channel. Additionally, the Urban Outfitters brand added 2 new locations in Amsterdam and a pop-up shop in Paris.
Richard A. Hayne, CEO of Urban Outfitters stated, “We have increased our product assortments, and we've seen a lot of success in increasing product assortment. “ The company is learning that its consumers are responding positively to both direct and omni-channel efforts. Urban Outfitters is working to respond to consumer needs across its many product categories, and the expansion of these offerings will create direct opportunities for its retail stores.
Urban Outfitters recently launched the 5th generation of its iPhone App, Urban On. The Urban On customer-centric app offers users exclusive access to rewards and retail events through encouraging social media interaction. The app has been downloaded by 370,000 customers since its launch. The Free People FP Me app attracted over 165,000 members since June of this year. The strength of the retailer’s direct-to-consumer channel and sales using mobile devices accounted for the largest percentage increase in transactions.
During the quarter, Anthropologie’s website had been updated, which resulted in driving strong direct-to-consumer sales gains. Anthropologie’s inventory control and growing product line also drove high-teen regular-price comparable sales and record merchandise margins and operating profits. Urban Outfitter’s Free People distribution channels reported solid double-digit sales gains. Free People’s wholesale revenues increased by 21 percent. These revenues were fueled by domestic and international expansion of its shop-in-shop concept.
The retailer plans to open 10 new stores during the final quarter of this year. The strong 7 percent increase in Retail comparable mechandise sales drove direct-to-consumer growth and comparable store sales. Both Anthropologie and Free People delivered their best ever third quarters. The company hopes to continue sales increases through technology investments, hiring talent to support online and store initiatives, and acquisition and retention efforts. Urban Outfitters is working to leverage its analytics to better understand the customer and improve efficiencies. At the same time, mobile commerce is rapidly being adopted by the retailer’s customers as a preferred virtual shopping choice, so investments in the mobile channel will continue.
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