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Urban Outfitters Sees Sales Spike From Nostalgic Collaborations

The retailer's throwback partnerships with brands like Adidas, Wrangler and Calvin Klein are winning back core customers.
Calvin Klein, Wrangler and Fila for Urban Outfitters. Photos:

Calvin Klein, Wrangler and Fila for Urban Outfitters. Photos:

After a few years of plummeting sales, Urban Outfitters, the brand, appears to be back on track. Urban's comparable retail sales increased 5 percent in the second quarter of fiscal 2017, outpacing its sister brands Free People (where sales were flat) and Anthropologie Group, where sales decreased 3 percent. Still, it was a record second quarter for Urban Outfitters, Inc., which saw overall revenue increase 3 percent over the same time last year to $891 million.

But back to the store whose sale section made up your entire college wardrobe: For one, those sales have decreased, since excessive markdowns were damaging the brand's image. Execs said during Tuesday evening's earnings webcast that it was getting more of its core customers (aged 18-28) — especially women — shopping merchandise at full price, thanks to the right mix of exclusive brand partnerships and its own proprietary product and, according to Urban Outfitters Inc. CEO Richard Hayne, "an abundance of exciting fashion happening."

More concretely, Urban Outfitters Group CEO Trish Donelly said one of the biggest strategies the company has employed has been a "focus on exclusive product and offering customers product he or she cant get anywhere but Urban Outfitters," including partnerships with brands that "get" Urban Outfitters. The retailer's collaboration strategy has been an interesting one, and one that banks on the nostalgia trend that's currently dominating fashion — which even seems to appeal to shoppers who should be too young to actually feel that nostalgia. Donelly pointed to its '90s-tinged collaborations with Calvin Klein (on items like cropped sweatshirts and loungewear with that signature waistband), Adidas Originals and Fila as being particularly successful, alongside a throwback Wrangler collection with a distinctly '70s feel. "The response has been tremendous," she said. The retailer also recently launched a very '90s Tommy Jeans collection.

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Tommy Jeans. Photo: Urban Outfitters

Tommy Jeans. Photo: Urban Outfitters

The retailer is also seeing success with its "emerging categories:" intimates, home and beauty. In addition, it sees music as a "new emerging category," with strong response to its selection of (also-nostalgic) vinyl, turntables, cassettes and cassette players.

While Urban's most successful products may be from bygone eras, the retailer has been very millennial-focused when it comes to marketing. Executives boasted an Instagram follower count increase of 65 percent to more than 5 million, with Snapchat viewership up 25 percent month over month. They did not, however, call out its progress on Instagram Stories.

In other news, Urban Outfitters plans to open two pizzerias this year. Yes, pizzerias.

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