After reporting that Urban Inc.'s net sales grew by just one percent in the three months ending Oct. 31, company execs explained Monday afternoon that store traffic was slow through the quarter, a trend that got slightly worse in October. Sure, the unseasonably warm fall was a factor, but as CEO Richard Hayne said on a call with investors, "We never, ever blame the weather for anything." Okay. So what's up?
According to Hayne, there's just not enough "newness in fashion" right now. The thing is, Anthropologie's home department is doing really well at the moment, as are beauty and intimates across Urban Inc.'s brands, which also include Free People and Urban Outfitters. It's apparel and accessories that aren't motivating people to shop.
"There are a number of categories that are going well, so I don't think the customer is without money," he said. "I think the customer is without fashion news."
Guess those fur-lined Gucci loafers didn't inspire as much trickle-down enthusiasm as they could have.
While Urban Inc. awaits some fashion news from on high, there are some areas in which it's been taking the initiative to innovate — like store concepts, for one. Nearly two weeks ago, it opened a new Urban Outfitters location in Austin called Space 24 Twenty, which will serve as a multifunctional "home base" for events, pop-ups, food trucks and concerts. The company has also relocated two Free People stores in Denver and Dallas to significantly larger spaces, making room for the brand's expansion categories, like footwear. A little over a week ago, Urban Outfitters launched a new print publication that "represents the culture and stories behind the UO Men's brand."
And, of course, there's the Pizzeria Vetri chain of restaurants Urban Inc. just acquired, news of which came out Monday morning. Though the retailer's execs say they believe in the future of casual dining, the announcement wasn't met with universal enthusiasm: Urban Inc.'s stock price dropped 9 percent by midday on Monday.