2 History of Urban Outfitters, INC First store opened in 1970 near University of PennsylvaniaRichard Hayne and Roommate Scott Belair called the store Free PeopleCame up with idea to open store for college students that would sell inexpensive clothing and items for dorms and apartmentsBecame huge success and incorporated in 1976 under name Urban OutfittersBegan opening more stores in metropolitan areas within 3 yearsAnthropologie opened in 1992
3 Type and Format of Stores American merchandiser offering two retail chains: Urban Outfitters and AnthropologieMultiple retail lines including Free People and TerrainUrban OutfittersCasual clothing, furniture, accessories and house wares assortmentsAges 18-30Every Urban Outfitters store is located in a renovated buildingNo stores look exactly the same
4 Target Customer Urban Outfitters Anthropologie Free People Terrain College aged individuals who are self expressive and culturally sophisticatedAnthropologieThirty to forty year old women who are contemporary, sophisticated, eclectic, and uniqueFree PeopleWomen aged who are interested in sixties and hip apparelTerrainMen and women interested in creative and sophisticated outdoor living and garden experience
5 Competitive Strategy and Positioning Highly visible store locationsCreative store designBroad merchandise selectionGets majority of merchandise from overseas vendors and never allows more than ten percent of in-store merchandise to be from same vendorModerately priced and unique from other competitive storesVisible presentation of merchandiseOffers Exceptional Customer serviceCustomer mailing lists, response rates, catalog presentations, merchandise delivery, web site design and availability
6 Merchandise Assortment Urban Outfitters: Men & Women’s apparel, shoes, and accessories to items for the apartment. Lifestyle-specific shopping experience particularly for urban- minded individual ranging from years of age.Anthropologie: women’s clothing, accessories, shoes, beauty, home furnishing, found objects, gifts, and decor portraying vintage to global design. Surrounds a sense of beauty, optimism, and discovery to the customer.
7 Merchandise Assortment cont. Free People: women’s apparel, accessories, and house ware. Specific for carefree, confident, and curious young womenBHLDN: heirloom-quality gowns, artisanal hair adornments, bridesmaid frocks, party dresses, footwear, jewelry, and lingerie. Offers brides, partygoers, and party throwers inspired alternative to life’s most anticipated milestones.
8 Merchandise Assortment cont. Leifsdottir: wholesale apparel line, extraordinary details to women’s clothing and accessories such as unique trims, vintage buttons and intricate linings. New sense of sophistication, timeless collectables with modern- dressmaking through fine fabrics and tailoring.Terrian: plants for all seasons, inspired items for home and garden, all at an on-site nursery. Transforms local garden centers, to an unforgettable experience for the senses
9 Service Description Direct-to-Consumers Catalogs Internet We believe that our sites increase the reputation and recognition of our brands with our target customers and help support the strength of our stores operation. They go on to say, We also believe that our catalogs have aided in expanding our distribution channels and increasing brand awareness.
10 Location and Site Choices Urban Outfitters: Operates in more than 130 stores in the United States, Canada, and Europe. Specific locations in Europe include: London, Ireland, and Sweden. Business district of heavily populated metropolitan citiesAnthropolgie: mainly online but operates in stores worldwide; on site location is in Wayne, Pennsylvania. Also, chooses sites in business districts in heavily populated metropolitan cities to attract customers walking down the street.
11 Location and Site Choices cont. Free People: wholesale brand, encompasses over 30 stores in the United States, three wholesale showrooms, cultivated relationships with 1,500 boutiques and departments stores across the globe. Bloomingdale’s, Nordstrom, Lord & Taylor, Belk, and Macy’sBLHLN: unveiled Valentines day 2011, and the first store will not open until fall, 2011.Leifsdottir: wholesale line that is sold to specialty stores.Terrian’s Flagship location is in Gen Mills, Pennsylvania.
12 Promotional Mix and Plan Implementation Key: shopping experienceCreating an experience, not just selling products.Goal: to sell a unique experienceDo not advertiseRely heavily on word of mouthCustomers will spread the word and promote the great products and experience that is available in all stores.Customer Relationship Management (CRM) is a vital component
13 Promotional Mix and Plan Implementation cont. Target Market is very small.Money goes towards decorating its stores and securing prime urban location.Avoids enclosed malls.Unique Layout of StoreKnown for their market penetration.Expanded market development with the addition of their new line BHLDN, Leifsdottir, and Terrain.
14 Pricing Stress quality of products High standards Wide demographics due to material of merchandiseDress range from $32 up to $548Shoes range from $29 up to $348
15 Logistics Urgency to Buy Small amounts of merchandise Love selling out of items
16 Organizational Structure (Led from top to bottom) Lead by Board of DirectorsCorporate OfficersRegional ManagersDistrict ManagersDesignersStore ManagersAssistant store managersSales Associates
17 Human Resource Policies Hiring: rely heavily on resumes, personality characteristics, and fashion knowledgeTraining: follows & mock customers testsExceptional benefits creates strong relationship with employeesHealthcare program to both full time and salaried staffThe plan addresses the costs of preventative care, hospital stays, emergency room visits, physician office visits, and prescription.
18 Buying OrganizationsAbility to ship lean amounts of merchandise due to Concept to MarketComplementary supply chain strategyFlexibility is keyDual Sourcing strategiesAlternate LocationsDecrease in turnaround timeFar EastPrivate Brand Merchandise from about 15 vendorsEstablishing relationships with their agentsEliminate middlemenTradeStone’s System
19 Data for fiscal years (2007-2010) In millions of dollars 2007:Net Sales: 1,224Cost of Goods Sold: 164Gross Margin: 452Expenses: 409Net Profit (Income): 116Number of Stores: Urban- 158, Anthropologie- 125, Free People- 32 stores, 1383 departmentAverage Inventory: 149Total Assets: 8992008:Net Sales: 1,508Cost of Good Sold: 224Gross Margin: 577Expenses: 414Net Profit (Income): 160Number of Stores: Urban- 160, Anthropologie- 128, Free People- 34 stores, 1,386 departmentAverage Inventory: 125.3Total Assets: 1,142
20 Data continued 2009: 2010: Net Sales: 1,834 Cost of Goods Sold: 299 Gross Margin: 713Expenses: 447Net Profit (Income): 199Number of Stores: Urban- 163, Anthropologie- 130, Free People- 35 stores, 1,389 departmentAverage Inventory: 111.5Total Assets: 1,3292010:Net Sales: 1,937Cost of Goods Sold: 338Gross Margin: 786Expenses: 522Net Profit (Income): 219Number of stores: Urban-170, Anthropologie- 135, Free People- 35 stores, 1,400 departmentsAverage Inventory: 106.2Total Assets: 1,636
21 Financial Ratio Analysis 2010200920082007Sales per store6.245.816.135.72Inventory220.127.116.11.3ROA15.214.812.711.9GMROI19.318.516.513.8Expenses9.83%10.02%10.39%10.99%Net Profit Margin11.0%12.0%14.0%15.0%Asset Turnover18.104.22.168Gross Margin %45.6%45.3%43.9%42.2%
23 Suggestions Open more retail stores Different locationsOpen free standing stores for Free People and Terrain linesOpen Warehouse stores selling all merchandise and brands in one locationOther lines should sell men’s and children’s merchandiseEnhance online shopping experienceIntegrate coffee shops and/or restaurantKeep employees satisfied by offering more incentives