Urban Outfitters has suffered yet another disappointing financial season. The namesake brand reported its sales fell 7 percent in the third quarter. This comes on the heels of a 10 percent fall in the previous quarter, continuing a streak of disappointing numbers this year.
CEO Richard Hayne attributed the fall partially to the design of Urban Outfitters stores, saying on the company's earnings call that they are “needlessly over-assorted and piece-y, which made the shopping experience more difficult and less appealing.”
The company recently announced a plan to gain its cool factor back by reaching younger shoppers on their smartphones. Urban Outfitters placed beacons, small devices that can send messages to a shopper's phone, in a handful of its stores to ping people with news of upcoming events, deals and rewards.
However, Urban has a track record of committing heinous retail and marketing faux pas. There was the T-shirt that told people to "Eat Less" and the "Jewish Star" shirt catastrophe. The most recent example surfaced in September in the form of a supposedly "vintage" Kent State University sweatshirt covered in highly insensitive fake blood spatter.
While the notoriously hipster-themed retailer's brick-and-mortar stores suffer, its Anthropologie and Free People lines continue to thrive and expand, increasing 2 percent and 15 percent in sales in the past quarter, respectively. Free People also continued a global expansion project, opening its first store in China in October and experiencing more than a 200 percent increase in European sales in Q3.
Business Insider reported that in spite of Urban Outfitters' in-store performance, its online traffic and sales actually increased during the third quarter.
This seems to support Hayne's claim about the unappealing layout. It's also possible the chain's tactless marketing ploys haven't stopped customers from shopping there, but merely dissuaded them from being seen doing it.