If you're a metropolitan hipster, Urban Outfitters has your outfit. The firm's 200 namesake stores -- mainly in the US, but also in Canada and Europe -- offer casual clothes, accessories, housewares, and shoes. The retailer courts somewhat older women at more than 165 Anthropologie shops. Urban Outfitters and Anthropologie sell via catalogs and e-commerce sites, too. It also operates a bridal brand and garden center store. The wholesale division makes, sells, and distributes clothing under the Leifsdottir and Free People labels for some 60 of its own stores and about 1,400 department and specialty stores worldwide. Chairman Richard Hayne founded Urban Outfitters as The Free People's Store in 1970.
Total company sales increased by more than 8% in fiscal 2012 (ends January) vs. the previous year, driven by nearly a 9% increase in retail sales and a 11% jump in wholesale. Sales rung up overseas climbed 23%, while domestic sales rose 7%. The retail segment got a boost from the addition of 57 new stores and an 11% gain in direct-to-consumer sales. Net income declined by about 32% over the same period.
Capitalizing on its rapid growth (sales have risen more than 60% over the past four years), the company plans to open as many as 60 new stores during fiscal 2013, including 23 Urban Outfitters stores, 16 Free People shops, 14 Anthropologie stores, a second BHLDN bridal shop, and a single Terrain garden center. Some of the new locations will be in international markets. Urban Outfitters has been increasing the number of Free People stores, while cutting back on wholesale customers, which include the upscale department stores Bloomingdales, Nordstrom, and Belk. Free People targets a narrow market -- women ages 25 to 30 -- with apparel, accessories, and gifts. Following a change in strategy announced in April 2011, Leifsdottir is now sold exclusively at Anthropologie stores and online, thereby discontinuing wholesale distribution of the brand.
Ever on the lookout for new brand opportunities, the fast-growing retailer launched its sixth brand -- named BHLDN -- in 2011. The wedding brand (pronounced "beholden") debuted online on Valentine's Day, and its own free-standing retail store debuted in Houston six months later. BHLDN offers its own-brand wedding gowns and some from guest designers (all priced from $1,000 to $4,000), as well as bridesmaid and party frocks, shoes, jewelry, and other bridal accessories. BHLDN competes with Urban Outfitters' rival J. Crew, which launched its own wedding collection in 2005. Previously, Urban Outfitters launched Terrain, a mix of home and garden products targeting the well-heeled set, and the Leifsdottir brand, a wholesale apparel brand for its Anthropologie chain, which made its debut in high-end department stores. Terrain, which grew out of Urban Outfitters' 2008 acquisition of J. Franklin Styer Nurseries, operates a single store in Glen Mills, Pennsylvania.
About 12% of the company's sales originate overseas, where it operates about 30 Urban Outfitters stores -- 20 in the UK and the rest in five other countries, including Germany. Also, the firm has been busy adding wholesale customers and growing its e-commerce business overseas. Together, the company's retail brands mailed about 48 million catalogs in fiscal 2012. The company plans to trim the number of catalogs it mail in fiscal 2013 by about 3 million titles.
Hayne is Urban Outfitter's largest shareholder with about 19% of the company's shares, followed by Goldman Sachs Asset Management with nearly 11%. – less