Urban Outfitters Inc. will be serving up pizza in addition to clothes. The specialty retailer known for its hip aesthetic is acquiring the Vetri Family group of restaurants including Pizzeria Vetri. The terms of the deal were not disclosed.
The stock market apparently doesn’t think it’s a perfect match and shares are sliding more than 4 percent in early trading, sending the stock to $23.47.
The Vetri restaurants were created and are coheaded by James Beard award-winning chef Marc Vetri and his business partner Jeff Benjamin. “Having known Marc for almost a decade and partnered with him through his charitable foundation, we are honored to have him, Jeff and the Vetri family join the URBN team,” said Richard A. Hayne, chief executive officer of Urban Outfitters Inc. Both companies are based in Philadelphia.
Urban Outfitters has struggled along with many retailers this year as apparel spending slowed, but restaurant spending boomed. The diversification is clearly an attempt to capitalize on this trend. “Spending on casual dining is expanding rapidly, and thus, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept,” said Hayne.
The move isn’t completely without precedent. There are some larger Urban Outfitter stores with cafes, like the one at Herald Square in New York. However, it doesn’t sound like shoppers will be able to grab a slice while they’re shopping for jeans; the restaurants will stay separate.
“It’s a perfect match,” says Marc Vetri. “URBN and the Vetri Family share the same singular goal – we pride ourselves on bringing the best possible experience to our customers and community. Through this partnership, and the experience URBN has in scaling growth opportunities, the Vetri Family will now be able to focus on what we do best — run restaurants that make people happy.”
Warm weather this fall has plagued retailers as shoppers see no reason to buy sweaters they can’t wear right away. Urban Outfitters has also come under fire for asking employees to volunteer to work for free. The retailer will report its third quarter earnings after the market closes on Monday and analysts estimate the company will earn 42 cents a share and deliver $869 million in sales.