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Urban Outfitters's Business Shows Signs of Life

Brand execs seemed cautiously optimistic about Urban Outfitters's future on Monday.
Photo: Dan Dennison/Getty Images

Photo: Dan Dennison/Getty Images

After clunking along for several seasons as its sister brands flourished, Urban Outfitters might finally be getting somewhere on its turnaround. In the final quarter of the year, which ended Jan. 31, the brand's comparable sales were up 4 percent, an improvement on the 7 to 12 percent decreases it saw in the preceding quarters.

What exactly improved? The product assortment customers were faced with, to begin. After suffering the ramifications of stocking redundant products and creating an overwhelming store experience, Urban has been working to reduce its style count while targeting trends "with greater conviction." It's exactly what fashion critics say of designer collections on the runway: you need to edit.

The Urban team is also making an effort to do digital marketing right, acknowledging that its messaging has, until this point, been rather "juvenile." That means fewer pop graphics and better photography, with the aim of driving sales for more full-priced items.

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While Urban was helped along by the fact that the fourth quarter of 2014 was going up against a comparatively weaker fourth quarter in 2013, execs say that they've seen an "improving rhythm" in its sales performance over the past few months, with that momentum continuing into February.

"By no means are we claiming that the business is fixed, but we feel we have established momentum in the right direction," says Trish Donnelly, Urban Outfitters's president of North America.

As for Free People, which has been winning and winning recently, the brand brought its comparable sales up 18 percent for the quarter, raking in $530 million over the course of the year. Anthropologie got a 6 percent boost, closing 2014 out with $1.38 billion in sales — just a hair behind Urban Outfitters's $1.39 billion year.

And hey: Urban Inc. also broke $1 billion in sales for the first time in the fourth quarter. Not a bad way to signal a breakthrough in its namesake brand's trajectory.