Philadelphia, Pennsylvania 19103
Telephone: (215) 564-2313
Fax: (215) 568-1549
Web site: http://www.urbanoutfitters.com
Sales: $827.8 million (2005)
Stock Exchanges: NASDAQ
Ticker Symbol: URBN
NAIC: 448140 Family Clothing Stores
Urban Outfitters, Inc., operates specialty retail stores under the UrbanOutfitters, Anthropologie, and Free People banners. The company operates two business segments: the lifestyle merchandising retail segment, which oversees store operations, and a wholesale apparel business. Both Urban Outfitters and Anthropologie offer customers hip and trendy apparel and home furnishings through retail locations, catalogs, and Web sites. The first Free People store opened in 2002. Thefreepeople.com Web site soon followed. As of January 2005, Urban Outfitters Inc. operated 65 Anthropologie stores, two Free People retail locations, and 75 Urban Outfitter stores in the United States, Canada, and the United Kingdom.
Urban Outfitters was created in 1970 by two retail novices, anthropology graduate Richard Hayne and his former roommate at Lehigh University, ScottBelair. Hayne was just back from two years working with Eskimos in Alaska as a VISTA Volunteer; Belair was a second-year student at Wharton School of Business and needed a project for his entrepreneur workshop. Over beer one night, the two came up with the idea of a store for college and graduate students, selling inexpensive clothes and items for dorm rooms and apartments. Pooling $5,000, theyopened the Free People Store in Philadelphia, near the campus of the University of Pennsylvania. In a 400-square-feet store decorated with packing crates and beat-up furniture, they offered inexpensive secondhand clothing, Indian fabrics, scented candles, T-shirts, drug paraphernalia, and ethnic jewelry. "I was that market," Hayne told Dan Shaw of The New York Times in 1994, adding that "Everyoneassociated with the store was that market."
The store was a success. "Belair got an A on the project," according to Robert La Franco in a Forbes article, "and went on to Wall Street, where he started his own bankruptcy workout business." Hayne stayed with the business, adding such merchandise as coffee mugs and glassware to the product line. In 1976, he moved to larger quarters near the university,changed the store's name to Urban Outfitters, and incorporated the company. In 1980, with sales around $3 million, Hayne opened a second store, in Cambridge, Massachusetts, close to several colleges.
In 1987, Hayne hired Kenneth Cleeland as chief financial officer. Cleeland, a graduate of George Washington University, had held financial positions with several wholesale and retail companies. AtUrban Outfitters, he instituted financial controls to deal with shoplifting problems and Hayne's rather casual bookkeeping practices. Profits increased, and Cleeland helped Hayne borrow $3 million to open six new stores within three years.
New stores in the chain followed the original concept and were located in metropolitan areas near college students. By 1995, Urban Outfitters stores would beestablished in Madison, Wisconsin; Ann Arbor, Michigan; Boston; Minneapolis; Seattle; New York; Washington, D.C.; Chicago; and Portland, Oregon. Moreover, the chain would also secure a presence in California, with five locations in college towns. Even when Hayne was tempted to drift from his original concept, store locations kept the company focused on its college-age market.
The new stores maintainedHayne's "counterculture" approach, and the company relied heavily on its buildings and interior displays to entice customers to enter, explore its stores, and buy its goods. "We always use renovated buildings," Hayne told the Washington Post in a 1993 feature. "Other stores will go into a mall and put their image into a space, where we use an existing space to enhance our image. None of our...