Despite declining apparel sales in the three months ending April 30, overall comparable retail sales were flat at Anthropologie thanks to the retailer's other popular categories: home, beauty, intimates, wedding and outdoor living. So to better support that growth, Anthropologie is investing in a new, larger store format to draw more shoppers in from further distances and get them to spend more time browsing and buying. This fall will also mark the launch of Anthropologie's largest home collection to date.
In the last two months, Anthropologie has reopened its Portland and Newport Beach locations with more than two and a half times the floor space of a typical store. (See the new format stores in the video below.) Shoppers will find full-scale rooms of furniture and decor as well as shop-in-shops highlighting beauty, intimates and shoes. Four more locations will be renovated in the coming year: King of Prussia, PA; Palo Alto, CA; Walnut Creek, CA; and Westport, CT. These new format stores might also include Anthropologie's wedding and outdoor living brands, the petite collection and/or some kind of dining option. On Wednesday's earnings call, Anthropologie CEO David McCreight explained that the brand's customer spends the same amount of money, if not more, on home as she does on apparel.
This also helps to explain why Urban Outfitters Inc. bought a bunch of restaurants from the Vetri Family group in November — a move that seemed puzzling at the time. In the next year, the company plans to open three new pizzerias and one new Anthropologie cafe.
Business is pretty good right now for the company at large: sales grew 3 percent to a record $763 million and profits reached $30 million. Urban Outfitters, the brand, is certainly struggling less: retail sales increased by 2 percent and the brand logged the lowest markdown rate of the past 10 years. On an earnings call, CEO Richard A. Hayne praised the retailer's new, cleaner, less cluttered stores and focused shop-in-shops as part of the successful strategy.
Hayne was less pleased with Free People, however, where retail sales decreased by 2 percent due to core product that he said was too safe, too known and not new. Other categories did better, including intimates, shoes, party dresses and activewear and the brand is also planning to open larger stores in Dallas and Denver. Meanwhile, the net wholesale business with specialty and department stores grew by 16 percent.