Boston, MA 05/22/2014 (wallstreetpr) – There is little left to wonder that why sales at Urban Outfitters, Inc. (NASDAQ:URBN) is plummeting, simple, because the company is just acting opposite to its name.
Fashion Sense
Most recently, the company reported a mere sales improvement of 6% for its overall brand sales, while Urban Outfitters’ sales nosedived by 12% in the reported first quarter. According to several reports, the lifestyle specialty retailed is lacking the most what it needs the most – ‘Fashion Sense’. Three years ago, a Bloomberg report mentioned a response of a customer, who had said that “Today I’d just look comical if I shopped there,”. “I’d be laughed at.” While the report dates back to 2011, but unfortunately the company has not even moved a inch away from that. Realizing the truth, the company’s CEO Richard Hayne had mentioned in his note during the earnings call on Monday that “There is still much work to be done for Urban to regain its fashion footing”. Since the day the company’s stock has only shed value than anything else.
The Two Saviors
The good news for Urban Outfitters, Inc. (NASDAQ:URBN) is that its other brands like Free People and Anthropologie emerged as a savior as they reported a sales surge of 8% and 25% respectively during the quarter. Those two brands cater to the needs of more older and affluent consumers, unlike the teen customers at its namesake brand. Another fact that Urban Outfitters can consider to be a bit relieving is that it is not alone as several other clothing stores meant to lure teen-age group are under pressure as parents increasingly limit their money spent. In the meantime, an analyst at Stifel Nicolaus, Richard Jaffe, commented that the results reflect over dependence of Urban Outfitters, Inc. (NASDAQ:URBN) on teen and hence suggests that it should shift its focus from teen to more sophisticated college-going group of customers who are less sensitive towards price.
