April Sproehnle Brooke-Ann Embry Natalie Read Urban Outfitters, INC. April Sproehnle Brooke-Ann Embry Natalie Read

History of Urban Outfitters, INC First store opened in 1970 near University of Pennsylvania Richard Hayne and Roommate Scott Belair called the store Free People Came up with idea to open store for college students that would sell inexpensive clothing and items for dorms and apartments Became huge success and incorporated in 1976 under name Urban Outfitters Began opening more stores in metropolitan areas within 3 years Anthropologie opened in 1992

Type and Format of Stores American merchandiser offering two retail chains: Urban Outfitters and Anthropologie Multiple retail lines including Free People and Terrain Urban Outfitters Casual clothing, furniture, accessories and house wares assortments Ages 18-30 Every Urban Outfitters store is located in a renovated building No stores look exactly the same

Target Customer Urban Outfitters Anthropologie Free People Terrain College aged individuals 18-30 who are self expressive and culturally sophisticated Anthropologie Thirty to forty year old women who are contemporary, sophisticated, eclectic, and unique Free People Women aged 25-30 who are interested in sixties and hip apparel Terrain Men and women interested in creative and sophisticated outdoor living and garden experience

Competitive Strategy and Positioning Highly visible store locations Creative store design Broad merchandise selection Gets majority of merchandise from overseas vendors and never allows more than ten percent of in-store merchandise to be from same vendor Moderately priced and unique from other competitive stores Visible presentation of merchandise Offers Exceptional Customer service Customer mailing lists, response rates, catalog presentations, merchandise delivery, web site design and availability

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 18-30 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.

Merchandise Assortment cont. Free People: women’s apparel, accessories, and house ware.  Specific for carefree, confident, and curious young women BHLDN: 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.

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

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.

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 cities Anthropolgie: 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.

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’s BLHLN: 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.

Promotional Mix and Plan Implementation Key: shopping experience Creating an experience, not just selling products. Goal: to sell a unique experience Do not advertise Rely heavily on word of mouth Customers 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

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 Store Known for their market penetration. Expanded market development with the addition of their new line BHLDN, Leifsdottir, and Terrain.

Pricing Stress quality of products High standards Wide demographics due to material of merchandise Dress range from $32 up to $548 Shoes range from $29 up to $348

Logistics Urgency to Buy Small amounts of merchandise Love selling out of items

Organizational Structure (Led from top to bottom) Lead by Board of Directors Corporate Officers Regional Managers District Managers Designers Store Managers Assistant store managers Sales Associates

Human Resource Policies Hiring: rely heavily on resumes, personality characteristics, and fashion knowledge Training: follows & mock customers tests Exceptional benefits creates strong relationship with employees Healthcare program to both full time and salaried staff The plan addresses the costs of preventative care, hospital stays, emergency room visits, physician office visits, and prescription.

Buying Organizations Ability to ship lean amounts of merchandise due to Concept to Market Complementary supply chain strategy Flexibility is key Dual Sourcing strategies Alternate Locations Decrease in turnaround time Far East Private Brand Merchandise from about 15 vendors Establishing relationships with their agents Eliminate middlemen TradeStone’s System

Data for fiscal years (2007-2010) In millions of dollars 2007: Net Sales: 1,224 Cost of Goods Sold: 164 Gross Margin: 452 Expenses: 409 Net Profit (Income): 116 Number of Stores: Urban- 158, Anthropologie- 125, Free People- 32 stores, 1383 department Average Inventory: 149 Total Assets: 899 2008: Net Sales: 1,508 Cost of Good Sold: 224 Gross Margin: 577 Expenses: 414 Net Profit (Income): 160 Number of Stores: Urban- 160, Anthropologie- 128, Free People- 34 stores, 1,386 department Average Inventory: 125.3 Total Assets: 1,142

Data continued 2009: 2010: Net Sales: 1,834 Cost of Goods Sold: 299 Gross Margin: 713 Expenses: 447 Net Profit (Income): 199 Number of Stores: Urban- 163, Anthropologie- 130, Free People- 35 stores, 1,389 department Average Inventory: 111.5 Total Assets: 1,329 2010: Net Sales: 1,937 Cost of Goods Sold: 338 Gross Margin: 786 Expenses: 522 Net Profit (Income): 219 Number of stores: Urban-170, Anthropologie- 135, Free People- 35 stores, 1,400 departments Average Inventory: 106.2 Total Assets: 1,636

Financial Ratio Analysis 2010 2009 2008 2007 Sales per store 6.24 5.81 6.13 5.72 Inventory 5.9 5.4 5.6 5.3 ROA 15.2 14.8 12.7 11.9 GMROI 19.3 18.5 16.5 13.8 Expenses 9.83% 10.02% 10.39% 10.99% Net Profit Margin 11.0% 12.0% 14.0% 15.0% Asset Turnover 1.3 1.2 1.4 Gross Margin % 45.6% 45.3% 43.9% 42.2%

Comparison to Top Competitor Urban Outfitters, INC. ROA: 15.2% Net Profit Margin: 11.0% Inventory Turnover: 5.9 Gross Margin Percentage: 45.6% GAP, INC. ROA: 17.0% Net Profit Margin: 6.5% Inventory Turnover: 5.3 Gross Margin Percentage: 44.0%

Suggestions Open more retail stores Different locations Open free standing stores for Free People and Terrain lines Open Warehouse stores selling all merchandise and brands in one location Other lines should sell men’s and children’s merchandise Enhance online shopping experience Integrate coffee shops and/or restaurant Keep employees satisfied by offering more incentives