Urban Outfitters Inc. reported strong earnings on Monday — and revealed its plans to roll out several new formats in the months ahead.
The company expects to open 45 stores in fiscal 2011. Among those will be an accessories-only test store for Anthropologie opening in Bethesda, Md., in the third quarter. In an interview with WWD, Glen Senk, Urban’s chief executive officer, said 50 percent of the product will be shoes, reflecting the online assortment.
“We’ll have two or three of those, and if it goes well, we’ll go ahead with it,” he said. “We’re also looking for locations for Leifsdottir [in New York] and we’re close. And we’re looking for a wedding store, but it’s unlikely we’ll open the first one in New York. It will probably open somewhere else like Texas, Nashville or Chicago.”
Urban’s four key growth initiatives remain increasing e-commerce, accelerating international expansion, adding new brands to the portfolio and continuing to open brick-and-mortar stores, Senk said.
In terms of international growth, a launch in Tokyo is on the horizon, set for 2012. On the European Continent, the company plans to focus on its two main markets, the U.K. and Germany, for the next 12 to 18 months before moving on to France. “Urban has a head start in Europe, but we’ll grow Anthropologie more quickly than Urban grew because we have the infrastructure now,” Senk said. “In the Far East, Anthropologie may have a larger business in Japan and Urban may be larger in other Asia-Pacific markets.”
Urban Outfitters on Monday reported earnings of $71.7 million for the three months ended July 31, compared with $49 million a year earlier. Earnings per diluted share were 42 cents. Total net sales for the quarter rose by 20 percent to $552 million, compared with $458.6 million in the same period last year.
Comparable store net sales, including direct-to-consumer channels, grew 11 percent for the quarter while comparable-store net sales increased 7 percent for the quarter. Comparable retail segment net sales at Anthropologie, Free People and Urban Outfitters increased 13 percent, 24 percent and 9 percent, respectively, for the quarter.
Senk said during a conference call with analysts that he doesn’t see much change in the economic environment, but the customer’s view of luxury and value has changed. “The customer is looking for authenticity, scarceness and freshness — differentiated product,” Senk said, stressing there’s been no indication of consumer price sensitivity.
“Sourcing is top of mind. It has become more challenging. There’s been a reduction in supply with factories closing. There’s more demand and certainly changes going on in China,” he said.
Senk said to cope with the sourcing challenges, the company put strategies in place as early as the middle of last year, including dual sourcing, and changes in the way it makes and ships product.
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