The collapse of wholesale sales have cut Urban Outfitters' turnover back by almost a third in this year's first quarter. A healthy profit made way for a nine-figure loss, forcing yet another company to cut management wages and bonuses.
In this year's first three months, turnover at the company owning the brands Urban Outfitters, Anthropologie and Free People dropped 32 % to 588 million dollars (530 million euros). The eponymous brand saw its sales tumble 24 %, Anthropologie's even went down 33 %.
As sales in the group's own stores "only" dropped by 28 %, due to stores being forced to close in the height of the coronavirus crisis, the wholesale department performed far worse, with a 74 % drop.
Profit becomes loss
Unsurprisingly, the group's profit took a bad hit as well - in truth, it completely disappeared. Urban Outfitters now reported a net loss of 138 million dollars (120 million euros), compared to a profit of 33 million dollars in the same period last year. So far, the crisis has caused UO to borrow an extra 220 million dollars and cut costs by an additional 100 millions. Where possible, payment of rent was also suspended.
On top of that, management salaries were lowered and bonuses cut. "The actions we’ve taken during the quarter to strengthen our balance sheet and help preserve liquidity provides us with financial flexibility during this difficult period", Fashion Network quotes CEO Richard A. Hayne.