By  on November 13, 2008

HAMBURG, Germany — While other young fashion chains may be stepping on the brakes, Urban Outfitters Inc. has instead stepped up its European expansion.

Since setting up in London a little more than a decade ago, the American specialty retailer has built up an almost $100 million business on this side of the Atlantic, according to Hugh Wahla, managing director of Urban Outfitters Europe. The 12,000-square-foot, two-floor store on Hamburg’s well-shopped Gansemarkt is the chain’s fifth European store to open this year, and brings the number of European doors to 17 — 18 when counting the brand’s online store.

Comparable-store sales in early November in Europe were up 20 percent, Wahla reported, adding “operating income [for 2008] will be excellent, even factoring in five new stores. We’ll have a good double-digit gain, which is outstanding.”

Hamburg marks the chain’s German debut, a move many viewed with skepticism given The Gap’s and Wal-Mart’s belly flops in the country, one of Europe’s toughest markets. While Wahla said the customer in Hamburg is more sophisticated and educated than in London, he was warned they’re more conservative.

“But we decided to give more credit [to the customer in] Hamburg and Germany. They’ve been starved to a certain extent because of the fear factor,” Wahla commented. “And even if we got it wrong, it doesn’t matter. We can change it. We’re totally flexible. It’s about learning. When we opened Dublin, it was a disaster, and now we have two stores there.”

If the store’s soft opening in early October is any indication, Hamburg is anything but a disaster. The plan called for opening day sales of 10,000 euros, or about $12,266 at current exchange, but amounted to 30,000 euros, or $37,650, the second largest take of any previous opening. “There was no advertising, no nothing,” said Wahla. “Just blogs, with people asking about car shares to come to the opening. The average transaction came to about 400 euros (or $500). They were buying into the lifestyle.”

There are currently three Urban Outfitters in London, two in Dublin, eight others throughout the U.K., plus stores in Antwerp, Belgium; Copenhagen, and Stockholm. No two stores are alike, nor do they copy the American originals in terms of design or assortment.

A Topshop veteran, Wahla was brought on board 10 years ago to “interpret Urban Outfitters for Europe. The first store I looked at was on Broadway, and [chairman and founder] Dick Haynes said I could take 10 to 90 percent of it. At the time, I felt specific products that were successful in the U.S. were not relevant for London, ” he recalled.

The U.S. customer was then younger, and with Topshop, Miss Selfridge, H&M, Zara and others, the competition for that target group was much steeper in the U.K., he pointed out. “I didn’t see a market for us on that level.” Instead, he and his team came up with a concept that “revolves around how people shop. If you look at people’s wardrobes, you’ll see key pieces and then more everyday gear. We wanted the best of everything in one environment, offering key brands and our own labels.”

Housed in a somewhat featureless, mixed-use building, the Hamburg store nonetheless makes the most of its two-floor glass front. The oversize windows and Urban Outfitters logo offer an open view of the store even from afar. Despite merchandise galore, that open feeling continues within an environment Wahla describes as “bohemian.”

With its continuously changing selection of 40 independent CDs, books, little gadgets and accessories, the shop’s first 65 feet are also “treated as window space. It’s the highest density area, but we don’t want or indeed make money with it. It represents what we do. Who we are,” he stated.

Then come women’s wear, lingerie and accessories, split into little areas featuring the private labels Lux, Silence & Noise, Kimchi & Blue and Free People. Farther along are shoes and accessories (now including Anglomania and Anna Sui footwear), and “Women’s Designer Collections,” featuring Luella, Twenty8Twelve, Won Hundred, Manous, MM6, Thomas Burberry, Sis by Spijkers & Spijkers (an Urban Outfitters Europe exclusive), Paul & Joe Sister, Religion, Vanessa Bruno Athé and Sass & Bide. Nearby is the company’s vintage remix selection, “Urban Renewal,” with skirts and tops fashioned out of old flannel shirts or bustier dresses created out of old corsets and slips.

Up the wide stairs on the second floor is men’s wear and playful housewares, as well as a bar with a turntable.

Hamburg is by no means the end of the line for Urban Outfitters in Germany. Wahla ignored pressure to first open in Berlin, noting “that’s only necessary if you want to buy credibility. But I’m confident we’ll be there and every major German city eventually. Germany is a bigger market than the U.K. and there’s nothing to stop us.”

France, and specifically Paris, is also in Urban Outfitters’ sights, “but we never open in a rush,” he said. “We’ll bide our time if it means there’s zero or six new stores for us next year. But wherever we look, there’s opportunity.”

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