It didn’t take long for Richard Hayne to reacclimate to life atop Urban Outfitters Inc.
Hayne, cofounder and chairman, took back his spot as chief executive officer when Glen Senk left in January, and he has been on the move since, plotting the company’s next steps.
The company boosted sales and controlled inventories in the second quarter, which helped it heartily top estimates. Earnings per share came in 9 cents better than the 33 cents analysts expected and investors sent the stock up 16.8 percent to $36.52 in after-hours trading.
Urban is charging ahead in Europe, setting its sights on Asia and looking to draw in new customers by devoting more dollars to online marketing.
Hayne hinted of other changes to come, telling analysts on a conference call that the retailer is “currently engaged in a process of rethinking the bricks-and-mortar experience with a goal of making it more exciting and enticing.” The ceo declined to get into specifics, but said the retooling would focus the stores on “experience and entertainment” and roll out in the next two years.
The firm is also slowing somewhat the pace of new store expansion in North America given that it’s approaching what it sees as the upper limit of its footprint, which is up to about 250 stores for both Urban Outfitters and Anthropologie and about 100 for Free People. Globally, the firm has 456 doors and expects to add a total of 51 stores this year.
Hayne was sanguine on Europe’s troubled debt markets and precarious financial situation. He said comparable-store sales in London were soft, with some product misfires and a shift in tourist business given the Queen’s Jubilee and the Olympics.
“We don’t see this as a long-term issue,” he said. “Barring any huge macro event, and we’re betting against that, we continue to expect to open more stores across northern Europe and… we are excited about increasing our direct-to-consumer business across Europe, so it’s pretty much business as usual and we expect a return to normalcy there.”
The firm’s Free People unit is looking for wholesale partners in Asia and is also planning a direct-to-consumer launch in the region.
In the U.S., the company has put in place a system that lets it fulfill online or in-store orders from any store or fulfillment center.
It has also expanded its Web-only offering and is ramping up its efforts to acquire new customers.
Hayne said the company has historically weighed how much it costs to attract a new customer with how much revenue that new customer generated immediately.
“We are now able to utilize our internal consumer database to calculate an approximate lifetime value of new customers and thus we can more accurately adjust the cost to the benefits of acquisition,” he said. Taking that into account, the company increased its Web-based marketing spend by 21 percent in the second-quarter and plans to boost it even more in the second half.
Urban’s second-quarter net income rose 8.1 percent to $61.3 million, or 42 cents a diluted share, from $56.7 million, or 35 cents, a year earlier.
Sales for the three months ended July 31 increased 11 percent to $676.3 million from $609.2 million. Comp sales rose 12 percent at the Free People unit and 6 percent at Urban Outfitters and were flat at Anthropologie.
Urban Outfitters also operates the BHLDN and Terrain chains and overall comps fell 1 percent, although comp inventories were down a sharper 5 percent as the firm strove to run a tighter ship. Direct-to-consumer sales increased 22 percent and wholesale sales rose 17 percent.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty