Profile: Urban Outfitters Inc (URBN.O)

Urban Outfitters, Inc., incorporated in 1976, is a lifestyle specialty retail company that operates under the Urban Outfitters, Anthropologie, Free People and Terrain brands. The Company also operates a wholesale segment under the Free People and Leifsdottir brands. In addition to its retail stores, the Company offers its products and markets its brands directly to the consumer through its e-commerce Websites, www.urbanoutfitters.com, www.anthropologie.com, www.freepeople.com and www.urbanoutfitters.co.uk, and also through its Urban Outfitters, Anthropologie and Free People catalogs. During the year ended January 31, 2009 (fiscal 2009), the Company launched Leifsdottir, the wholesale division of its Anthropologie brand.

Retail Segment

Urban Outfitters targets young adults aged 18 to 30. The product offering includes women’s and men’s fashion apparel, footwear and accessories, as well as an eclectic mix of apartment wares and gifts. Apartment wares range from rugs, pillows and shower curtains to books, candles and novelties. Stores average approximately 9,500 square feet of selling space, and carry an estimated 35,000 to 40,000 stock keeping units (SKUs). Its stores are located in large metropolitan areas, select university communities, specialty centers and enclosed malls. During fiscal 2009, the Company circulated approximately 12 million Urban Outfitters catalogs. As of January 31, 2009, the Company operated 142 Urban Outfitters stores in North America and Europe, as well as the www.urbanoutfitters.com and www.urbanoutfitters.co.uk Websites and the Urban Outfitters catalog. During fiscal 2009, Urban Outfitters’ North American and European store sales accounted for approximately 35.9% and 6.2% of consolidated net sales, respectively.

Anthropologie tailors its merchandise and inviting store environment to sophisticated and contemporary women aged 30 to 45. Anthropologie’s product assortment includes women’s casual apparel and accessories, home furnishings and an array of gifts and decorative items. The home furnishings range from furniture, rugs, lighting and antiques to table top items, bedding and gifts. Stores average approximately 7,400 square feet of selling space, carry an estimated 40,000 to 45,000 SKUs, and are located in specialty retail centers, upscale street locations and enclosed malls. During fiscal 2009, it circulated approximately 21.5 million catalogs. As of January 31, 2009, it operated 121 Anthropologie stores in the United States, as well as the www.anthropologie.com Website and the Anthropologie catalog. During fiscal 2009, Anthropologie’s store sales accounted for approximately 35% of consolidated net.

The Company’s Free People retail stores offer Free People branded merchandise targeted to young contemporary women aged 25 to 30. Free People offers a merchandise mix of casual women’s apparel, accessories and gifts. Free People retail stores average approximately 1,400 square feet, carry up to 5,000 SKUs, and are located in enclosed malls, upscale street locations and specialty retail centers. The retail channels of Free People expose both its wholesale accounts and retail customers to the full Free People product assortment and store environment. During fiscal 2009, it circulated approximately 6.7 million catalogs. As of January 31, 2009, it operated 30 Free People stores in the United States, as well as the www.freepeople.com Website and the Free People catalog. During fiscal 2009, Free People retail store sales accounted for approximately 1.8% of its consolidated net sales.

Terrain merchandise includes lifestyle home and garden products combined with antiques, live plants and flowers. The Company’s Terrain garden center operates approximately 20,000 square feet of enclosed selling space, as well as approximately two acres of outdoor seasonal selling space used for live plants, accessories and outdoor furniture. Terrain also offers a variety of landscape and design service solutions. During fiscal 2009, Terrain retail sales accounted for less than 1% of its consolidated net sales.

Wholesale Segment

The Free People wholesale division was established to develop, in conjunction with Urban Outfitters, private label apparel lines of young women’s casual wear that could be sold at Urban Outfitters stores. Free People’s range of tops, bottoms, sweaters and dresses were sold worldwide through approximately 1,800 better department and specialty stores, including Bloomingdale’s, Nordstrom, Lord & Taylor, Belk, Urban Outfitters and its own Free People stores. Free People sells its merchandise under its Free People and other labels. It also distributes its Free People products in certain department stores using a shop-within-shop sales model. Free People maintains wholesale sales and showroom facilities in New York City, Los Angeles and Chicago. During fiscal 2009, Free People wholesale sales accounted for approximately 5.8% of consolidated net sales. In addition to selling its merchandise to specialty retailers, Free People wholesale also shares production sourcing with its retail segment.

Leifsdottir designs, develops and markets sophisticated women’s contemporary apparel, including dresses, tops and bottoms. Leifsdottir is sold through luxury department stores, including Bloomingdale’s, Nordstrom, Neiman Marcus and Bergdorf Goodman, select specialty stores, and its Anthropologie stores. It also distributes its Leifsdottir products in certain department stores using a shop-within-shop sales model. Leifsdottir maintains a wholesale sales and showroom facility in New York City, New York. During fiscal 2009, Leifsdottir wholesale sales accounted for less than 1% of total consolidated net sales.