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Urban Outfitters, Inc.
Transcript of Urban Outfitters, Inc.
Originally the Free People store
Incorporated and publicly traded in 1976 (URBN)
Urban Outfitters now operates over 208 stores in the United States, Canada, and Europe both online and in stores as well as through the catalog Industry Analysis History Urban Outfitters, Inc. Customers Want:
Exceptional shopping experience
Unique merchandise The Target Company Jay Bhula
Team Saturday | Mgmt 162 Urban Outfitters 18 to 28
Unique sense of style
"Metropolitan Hipsters" Anthropologie Women aged 28 to 45
Well traveled and well educated
Prefer shopping in village-like locations than entering a mall Free People Women aged 25 to 30
Alternative and eclectic sense of style
Creative and confident BHLDN Brides and bridesmaids
Likes unexpected details and vintage products
Romantic and fun Terrain 28 to 45; married couples
Homeowners looking to create a sophisticated outdoor living and gardening experience
Shop for locally sourced and artisanal products "To offer a product assortment and an environment so compelling and distinctive that the customer feels an empathetic connection to the brand and is persuaded to buy" Key Products Men + Women's casual apparel and accessories
Home furnishings and apartment wares
Wedding apparel and decorations
Gardening and outdoor living furnishings and accessories Value Creation Frontier Strategy Financial Health Customer Intimacy Leaders One-stop shop for unique merchandise
Inviting and intricate store environment
Superior customer relationships
"We stock what we love"
Customers are soul mates High school and college aged
Out of college
Entertaining in your own home and backyard Competitors Retail Apparel Industry
Primarily participates in markets in Europe and the US
Segments: price tiers, style, events
Sells womenswear and menswear
Market is made up of many small and large competitors European apparel retail industry sales value $412 billion
United States apparel retail industry value of $329 billion Casual, American Style clothing at accessible price points
Target market: men, women and children Industry Growth Casual luxury clothing with a preppy, youthful all-American style
College-age sales staff and models instill its stores with an upscale fraternity-house feel
Target Market: 18-22 years old, male and female Cheap, chic clothing; sell best design under an inexpensive clothing label
Target Market: 18-45 years old, male and female Largest fast-fashion retailer in the world (supply chain: 2 weeks to a month for some merchandise)
Target market: young, price-conscious and highly sensitive to latest fashion trends SWOT URBN’s Headquarters Decommissioned Philadelphia Navy Yard (2006)
Result: 11% decrease in employee turnover, fewer sick days have been used and improves their ability to attract new talent Revenue By Segment Growth Investor Return Segment Growth Location Growth
Added 21 new stores in FY2012 – 13 in the United States and 8 in Europe Geographic Sales Growth:
Foreign: 23% 5-year high: $43.81
Repurchased 10 million shares
November 16, 2010
August 25, 2011 FY2013 The Future Questions? Porter's Analysis Large firms have advantage
Product differentiation Low switching costs
Manufacturers abroad have lower costs
Fragmented market New Entrants: MODERATE Latest trends drive demand
No switching costs Online wholesalers
Homemade clothing Steady growth over the last 2 decades
Growth of US Retail Clothing Sales
1992: $85 billion
2012: $165 billion
Demand driven by clothing trends and personal income
Key US Retail Giants: Gap, Limited Brands, TJX and Ross
Global Retail Giants: Zara, H&M and Gap Customer Growth With URBN Suppliers: MODERATE Buyers: MODERATE Substitutes: WEAK Competitor Rivalry: MODERATE / STRONG Revenues: $2.79B Gross Margin Rate: 36.9% Net Income: $237.3M Comparable Store Net Sales: Flat 49 new store openings Moderate customer loyalty
Latest fashion trends Life Cycle Growth Stage
New Trends keep the industry expanding.
Stores that go out of style experience shake out URBN Timeline Free People Wholesale Anthropologie and Europe 2008 BHLDN 2011 Recent News 2012 1990's Founded in 1984
Began as a wholesale brand
75 stores in the U.S. and 3 wholesale showrooms (New York City, Los Angeles, and Chicago)
Relationships with over 1,400 specialty boutiques and department stores across the globe Anthropologie founded in 1992
Located in specialty retail centers, upscale street locations and enclosed malls.
Operates 168 stores in North America and Europe, through two websites, and their catalog.
In 1998, expanded Urban Outfitters and Anthropologie stores to Europe in London. Launched on Valentine’s Day 2011 in Houston, Texas
Located in specialty retail centers and street front locations.
A second BHLDN store was opened in Chicago, Illinois in the first quarter of 2013. In October 2012, URBN announced an exclusive distribution and marketing agreement with World Co, Ltd. in Japan
Richard Hayne was named CEO after Glen Senk retired in January 2012.
Hayne: Co-founder and chairman since 1976 In the Past:
Two stocking seasons (Fall and Spring)
Continuous flow of new products
Yearly cycle sees boosted sales in Spring and Fall as well as the end of the 4th quarter Market Share US Retail Sales make up 28% of global market
European Sales make up 35.1% of global market
Germany makes 18% and
The UK makes up 13.2% of Europe's retail apparel market URBN is projected to have steady growth in the short to medium term as part of their plan for sustainable growth.
URBN has a significant growth opportunity.
Urban Outfitters and Anthropologie hope to have 100 stores in each chain in Europe by the next decade
Too much growth runs the risk of losing competitive advantage of efficient management Terrain Founded in 2008
Operates two garden centers and plans on opening a third this year. Trends Positive Trends: no long-term financial debt
continued net sales growth Negative Trends: decreasing gross profit rate
negative comparable store net sales growth