URBAN OUTFITTERS HITS LONDON
Byline: James Fallon
LONDON — Urban Outfitters Inc. wants to be as hip on Kensington High Street as it is on Broadway in New York.
The retailer of women’s and men’s wear and home furnishings aimed at the 18-to-30-year-old fashion customer has opened a five-floor, 16,500-square-foot store in Kensington here as the first step in a major expansion program that eventually will see stores throughout Europe and the Far East, said Dick Hayne, Urban Outfitter’s co-founder and president.
“Our goal is to open seven to 10 Urban Outfitters a year and another six or seven Anthropologie stores,” Hayne said during an interview in the new London store, which opened June 4. “We will do two to four Urban Outfitters stores in Europe [per year], and the remainder will be in the U.S.”
There are no plans at the moment to open Anthropologie stores overseas, Hayne said. The company currently has 28 Urban Outfitters stores in the U.S., including one in San Diego that opened earlier this month, and 11 Anthropologie units.
Anthropologie deals in women’s wear and accessories aimed at people from 15 to 45. The company also has just signed a lease for a 9,000-square-foot store in the East Village in New York, making it the first major fashion retailer other than the Gap to locate in that area. The store is scheduled to open this summer.
“We always try to be sensitive to the needs of the local community and not to be perceived as this huge, monolithic chain,” Hayne said, referring to the low-key opening planned for that site. “The East Village is totally cool now, and we don’t want people to curse our arrival. So we need to make the store commensurately cool, which we hope we will.”
Urban Outfitters’ increased store-opening program comes as the company’s growth appears to be slowing in the U.S. It reported a 4.7 percent increase in net income to $13.9 million on a 10.7 percent rise in sales to $173.1 million in the year ending Jan. 31. The increases were below levels of previous years and the company blamed the declines on a slowdown in both retail and wholesale sales.
Wholesale volume is expected to fall in fiscal 1999 after growing 8 percent in fiscal 1998 and 30 percent in fiscal 1997, the company said in its 10-K filing with the Securities and Exchange Commission.
But Hayne firmly believes the London move will be a success. The store should have sales of more than $8.15 million in its first year, which is similar to the sales of Urban Outfitters’ U.S. stores, Hayne said.
The move into London comes after long consideration. Urban Outfitters hired the consultants Piper Trust Investments in 1992 to explore the retailer’s potential overseas.
“They said the concept would travel, but it needed to be tweaked a little,” Hayne says. “We took that under advisement and six years later decided London was the best place for a number of reasons: The language is similar and it’s also alive now.”
The London store — which like the company’s others was designed by Ron Pompeii, its store designer — is one of the company’s largest and mirrors its units in the U.S.
Located in a former book shop, the store has the feeling of an excavation or construction site with concrete floors and stairs, bared crumbling brick and iron girders mixed with more finished aluminum cladding and hardwood floors.
Women’s wear is on the ground, first and second floors; men’s wear is in the basement, and home furnishings are on the ground and second floors.
A mezzanine area above the basement is a leased department selling records and compact discs. A leased department in another part of the store offers vintage clothing, and a third is a coffee bar.
About 45 percent of the 50,000 to 60,000 stockkeeping units are women’s wear, 20 percent men’s wear and 22 to 23 percent home furnishings, a buying executive in London said. The remainder of the product mix is made up of such things as records and vintage clothing.
The area requiring the most adaptation was the selection of labels. Urban Outfitters recognized it simply couldn’t export the brands it was selling in the U.S. to the U.K., so it hired a four-person buying team for the London store.
The team worked for several weeks in the U.S. stores to learn about their customers, then returned to London to buy labels that fit the Urban Outfitters image, but were more likely to appeal to the Londoner.
“We thought the merchandise was somewhat transportable, but we didn’t know how much,” Hayne says. “I told the team here that I thought no less than 20 percent would be the same and no more than 80 percent should be. In the end, it turned out that 60 to 70 percent is completely different. It was simply a roll of the dice, and so far, it seems to have worked.”
The women’s wear brands include Urban Outfitters’ own labels of Free People, Bulldog and Co-operative; such established British labels as Conscious Earthwear, Sun & Sand, Bionic, Born Free, Lady Soul, Mickey Brazil, Duffer of St. George and Dave & Joe; international companies like G Star and Evisu, two hot denim brands from The Netherlands and Japan, respectively, and relative newcomers such as Nadine Powell, Grab & Mac, Product 250 and Lorna Green.
In accessories, the store carries such labels as Johnnie Loves Rosie, Urban Decay, Patric Sweeney and Sian Evans.
The buying executive said changes were necessary because of the difference in the locations of the London versus U.S. stores, as well as their different customers.
“Urban Outfitters is very campus-based in the U.S., where in the U.K. it’s a slightly different culture,” he said. “The customer in America really starts at about age 15, where here it’s about 18. We had to adapt to that.
“A lot of the products are sourced from the U.S. because you can get good, directional fashion from America,” he added. “But the customer here shops much wider. She or he might go to Duffer of St. George or Selfridges, but they’ll also go to Camden and Portobello markets and buy. What we tried to do was bring together in one store the best of everything in London.”