American clothing company Urban Outfitters saw its third quarter turnover increase 12 %, reaching 774 million dollars (570 million euro), while net profit grew 20 % to 70.3 million dollars (52 million euro).
Urban Outfitters’ chain fell back
Anthropologie and Free People chains performed well and contributed to the increase: Anthrolopogie stores which had been opened more than a year ago, saw their turnover increase 13 %, Free People even managed a 30 % growth.
The result was that the like-for-like turnover for Urban Outfitters rose 7 %, even though Urban Outfitters’ stores only grew their turnover 1 %. The chain particularly underperformed in North America, its home turf.
Too expensive for teenagers
CEO Tedford Marlow credited missed trends, non-efficient marketing and a lousy creative execution for the drop in turnover. That is why the company fears it will have to push through more price drops during the Christmas holiday in order to compete with other chains.
“This promotional environment could negatively impact our gross profit margins for the fourth quarter”, Chief Financial Officer Francis Conforti said.Analysts believe Urban Outfitters suffers from the low numbers of part-time jobs for teenagers: with a lack of cash, these consumers choose cheaper brands.
(Translated by Gary Peeters)