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Fashion Is Dull, and Other Key Points About the State of Urban Outfitters's Business

Execs are still waiting for the second coming of skinny jeans.
An Urban Outfitters store. Photo: Justin Sullivan/Getty Images

An Urban Outfitters store. Photo: Justin Sullivan/Getty Images

Like so many other retailers, Urban Inc. didn't have the sort of soaring holiday season most brands would hope for. As it initially reported in February, sales for the three months ending Jan. 31 were flat compared to last year, coming in just north of $1 billion. Still, revenue rose from $3.3 billion to $3.4 billion during the year as a whole, Urban Inc. reported on Monday afternoon.

Those are the numbers. (And here are a few more: comparable sales in the quarter deviated rather predictably by brand, with Urban Outfitters down by 3 percent, Anthropologie down by 2 percent and Free People up by another 2 percent.) Of course, the Urban Inc. executive team also gave us some more meaty details to mull over. Read on for a few key things to know about the Urban business right now.

Fashion is mad dull right now

They've said it before — back in November, actually — and they'll say it again: there's not that much interesting happening in fashion currently. ("Mais non!" you cry.) The executive team cited a variety of challenges in the broader retail environment, like increased competition and stagnant household income, but noted that fashion specifically is dealing with a lack of major new trends. The last thing that came along and really shook up Urban's business was skinny jeans... like, 10 years ago.

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Urban Outfitters is successfully moving away from markdowns

Despite the fact that Urban Outfitters hit just $415 million in sales during the fourth quarter, down from the $438 million it brought in during the same period in fiscal 2015, it is improving in its mission to put less product on markdown. (Why? It's bad for a brand's status, and a hard cycle to break if shoppers get used to always seeing clothes on sale.) Regular price sales were up during the quarter, execs said, and they're looking to continue that momentum in the coming months.

At Free People and Anthropologie, apparel isn't growing very quickly

At Anthropologie, every category except apparel showed positive growth during the quarter. (They're working on improving the assortment now.) Over at Free People, clothes also grew slowly relative to its other categories.

But lingerie is going gangbusters

Urban execs reported that across all of the company's brands, the intimates category has been seeing double-digit growth — an "enormous opportunity." Other areas that the team is actively working to develop include shoes, home, beauty and activewear. 

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