Retail hasn't fallen back into a recession, so what explains the weird losing streak of this hip, iconic clothes company?
Hold on to your TOMS shoes and skinny jeans - it looks like there's trouble at Urban Outfitters.
Since turning in a disappointing round of third quarter earnings, URBN Inc. -- the parent company of Urban Outfitters, Anthropologie, and Free People -- has been taking a bit of a beating. Its stock is now down 27% for the year. And today, Bloomberg piled on with an article taking the retailer to task for losing its fashion sense.
Uh huh. Bloomberg. When a business wire is criticizing your clothes, you've got a problem. Even CEO Glen Senk acknowledged the company's most recent results "fell short."
What's wrong? In a word, women. Female shoppers aren't in love with the product lines at either Urban or Anthropologie. And the company is scrambling to find a fix.
Urban's sales actually increased overall. But the underlying numbers weren't pretty. Its inventories of unsold clothes are up 27% for the quarter. And its gross profit margins slipped because stores had to slash prices on so much merchandise. By the all important measure of comparable retail segment net sales--essentially purchases made either online or at stores that have been open for more than a year--the company was also down for the quarter. Urban Outfitters was flat on that measure. Anthropologie fell 7%. The bottom line: Two of the company's three big brands are floundering.