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Urban Outfitters Inc. on Tuesday saw its shares slide after a day earlier warning it missed Wall Street’s third-quarter sales forecast, and revealed a management shake-up at the Anthropologie, Terrain and flagship divisions.
Investors drove Urban shares down 5 percent in midmorning trading and the stock finished the day at $26.34, down 87 cents, a decline of 3.2 percent.
The sales shortfall was attributed to excess inventory and less-appealing assortments at Anthropologie. “It does not have the spirit of Anthropologie,” said Roxanne Meyer, a retail analyst at UBS Investment Research. “I don’t think it reflects what Anthropologie is. It’s lost its feminine edge and novelty. There are a lot of dark colors. It’s trying too hard to be trendy.”
“We have not liked the merchandise at Anthropologie or Urban Outfitters for quite some time, and we find the prices, especially at Anthropologie, to be too high compared to like items at other retailers,” said Jennifer Black, a retail analyst at Jennifer Black & Assoc. “Our biggest concern is the competitive landscape and whether Urban can maintain its edgy, yet eclectic position in the marketplace.”
David McCreight, former president of Under Armour Inc., was named chief executive officer at Anthropologie Group, which includes the North American and European Anthropologie businesses and BHLDN, beginning Nov. 15. “The management changes were overdue,” said Richard Jaffe, a retail analyst at Stifel Nicolaus. “The Anthropologie business needed some increased depth in leadership. Glen [Senk, ceo of Urban Outfitters Inc.] was able to lend a steady hand to Anthropologie, but when Urban started having trouble, he was spread very thin.”
McCreight’s arrival will free Wendy Wurtzburger, chief merchandising and design officer, to focus on the product. She shared the title of co-president with Wendy McDevitt, who is now president of Terrain. The co-president roles at Anthropologie have been eliminated. Kristin Norris, managing director of BHLDN, was named chief creative officer of Anthropologie, and Denise Albright was appointed chief operating officer.
Meyers noted that Senk gave some of his most valuable players new challenges, but now may have decided that they’re too valuable to Anthropologie. Johanna Uurasjarvi, the Finland-born design director of Anthropologie, launched the Leifsdottir brand. However, Leifsdottir’s wholesale business was closed and the brand will be sold exclusively at Anthropologie stores and online. Uurasjarvi is now executive creative director of product design for Anthropologie.
The ceo position at Urban has been vacant since Steve Murray, former president of VF Corp’s Action Sports Coalition, resigned in April, a year after he began. Charles Kessler was named chief merchandising officer.
“We trimmed earnings estimates by 2 cents a share for the [third] quarter,” said Jaffe. “It’s not like this thing is broken. It’s still highly profitable and well-positioned.”