Urban Outfitters Inc. hears wedding bells in its future.
This story first appeared in the March 5, 2010 issue of WWD. Subscribe Today.
During Thursday’s fourth-quarter conference call with analysts, the retailer unveiled record profits and revealed its sixth brand will revolve around nuptials.
The Philadelphia-based company will launch its wedding business initially as a Web site, followed by stores. Glen Senk, chief executive officer, said the weddings business should be worth at least $500 million and probably more than $1 billion in 10 years.
In the three months ended Jan. 31, Urban posted a 91.6 percent increase in net income to $77.7 million, or 45 cents a diluted share. In the year-ago period, profits totaled $40.6 million, or 24 cents a share. Analysts polled by Yahoo Finance had estimated earnings per share of 40 cents on average.
Net sales in the quarter grew 15.8 percent to $588.5 million from $508.1 million in the comparable 2008 period. Same-store sales rose 4 percent company-wide with Anthropologie gaining 10 percent, Free People up 11 percent and the namesake unit flat. Gross margin leaped to 41.7 percent of sales from 34 percent in the year-ago quarter.
For the full year, net income rose 10.3 percent to $219.9 million, or $1.28 a share, from $199.4 million, or $1.17 a share. Revenues advanced 5.6 percent, to $1.94 billion from $1.83 billion in the prior year, as comps rose 1 percent.
The company plans to open 45 stores in 2011 for its brands, including the first one for wholesale label Leifsdottir.
With its latest concept, Urban hopes to grab a piece of the $60 billion wedding pie. The average cost of a wedding is $45,000, with the average bride spending $4,500 on her clothing, Senk said. Priced from $1,000 to $5,000, Senk characterized the company’s gowns to be sold as “heirlooms, to be passed on from one generation to the next.” The luxe dresses will be designed by the Anthropologie team and by guest designers. Brides ordering a wedding gown online will be able to schedule local fittings. Bridesmaids’ dresses, fine jewelry, accessories, shoes, invitations and a bridal registry with gifts will be part of the mix. “We want to offer a community for brides,” Senk said. “Travel services, wedding planning and flowers are things we could potentially offer. We’re trying not to be just about selling products. We want to help the bride plan the wedding.”
Urban Outfitters’ other initiatives in 2010 include expanding the European store base for Anthropologie and Urban Outfitters and launching Free People on the Continent. A European Web site is in the works and Anthropologie is set to open a second London store. Urban will also open company-owned stores in the Far East and develop a Web presence in the region.
Driving e-commerce is a top priority. Urban has added sizes and expanded the assortments of its online businesses. “We have begun offering things we wouldn’t normally carry in the stores, such as swimsuits on the Anthropologie site and bicycles at Urban Outfitters online.” Senk said the company will continue to invest in the direct-to-consumer business, which is the most profitable channel for Urban, with return on investment two to three times that of other areas of the company.
A Web site for Leifsdottir bowed two weeks ago and the first Leifsdottir store is expected to open in Manhattan next year. Handbags and shoes are due to arrive in the fall, along with other accessories.
“The store will be smaller and special with a very curated assortment,” Clare Schultheis, Leifsdottir’s managing director, said in an earlier interview. “We can imagine taking an old patisserie and pairing it with Leifsdottir and serving cupcakes. We like the authenticity of that. We imagine a whole unique Leifsdottir lifestyle concept with jewelry and fragrance.”
Schultheis said the company envisions about 200 stores for the brand, adding, “it won’t be the white box in the mall.”
The Leifsdottir Web site features ethereal, dreamlike visuals that have a painterly look. Packaging picks up on the brand’s tailoring details with dressmaker pattern paper lining boxes instead of tissue paper and a clothing pin as a seal.
Shares of Urban Outfitters closed at $34.34, up 94 cents or 2.8 percent on Thursday.