Urban Outfitters Net Profit Fell 9.8%

American Apparel Group

On Wednesday, its first quarter financial results for the 2016 fiscal year were announced. By April 30th, group net profit fell to 9.8% from the US $34 million 800 thousand in the same period last year to 29 million 600 thousand US dollars.

Group spokesman said that earnings per share of the group remained at 25 cents, and net sales rose 3% to $763 million, compared with $739 million in the same period last year.

Earlier, analysts forecast that the net sales of the group in the first quarter, including direct sales channels, would drop by 0.5%, but in fact it rose by 1%.

Under the retail channel, according to the brand division, Urban Outfitters net sales rose 2%, Anthropologie net sales were flat, Free People net sales fell 2%, while wholesale channel net sales rose 16%.

Free People brand chairman Richard Hayne said that the sales performance of Free People in the first quarter was unsatisfactory, and the pressure on inventory increased. Discount sales activities were also increasing.

Urban Outfitters, which started building brand two and a half years ago, has achieved higher utilization in the first quarter of this year, and sales of direct selling channels have gained double-digit growth.

Urban Outfitters group said it plans to open 24 new stores this year. A group spokesman said it will open 6 Free People stores and 2 Anthropologie stores in North America in the second quarter, and open a Urban Outfitters store in Europe.

Richard Hayne points out that the consumption of household products and catering expenses of Urban Outfitters consumers occupy most of the total consumption.

Fluctuations in consumer spending on clothing are decreasing year by year.

The group's brand Anthropologie, chairman and CEO David McCreight, said sales growth of both brand home products and cosmetics were double digit growth. The company will open two new stores in Oregon and California, with shops ranging from 20 thousand to 30 thousand square feet.

David McCreight introduces that the new store will provide consumers with a broader choice of home products, and will also specialize in selling beauty products.

In addition, the small clothing store BHLDN and the catering experience store Terrain will also be included in the new shop.

David McCreight stressed that compared with the widely weak clothing industry, Anthropologie has the opportunity to improve its brand to attract consumers. By shortening design time and improving product quality, and improving product quality, it can not only attract new customers but also retain old customers.

David McCreight also pointed out that according to the first quarter's earnings data, a complete example has been drawn, and multi-channel contact with consumers will help promote sales.

The group opened clothing stores in 75 places, and opened e-commerce platforms and catalog shopping businesses. These businesses achieved double-digit growth in the first quarter, which shows that Anthropologie's expansion of product categories will be more conducive to retaining existing customers.

David McCreight said: "to achieve the goal of doubling revenue of Anthropologie, companies need to add more product categories, and brands need further expansion. At present, BHLDN and Terrain play a very good experiential role.

This summer, the company plans to have more than 100 cosmetics stores. "

Earlier, Urban Outfitters also appeared in the flagship store of Herald Square in Manhattan, New York. The sale of clothes was no longer the only focus. The store had been pformed into a downright lifestyle experience center. Apart from clothing display, coffee shops, hair salons, vinyl records and beauty shops were enough to reflect changes in the consumer market.

Earlier last year, Urban Outfitters bought a pizza chain called Pizzeria Vetri. Richard Hayne said it would adopt a new approach to expansion, and restaurant sales had steadily risen. Consumers were more inclined to spend money on eating out than buying more clothes.

Richard Hayne also revealed that the group has invested heavily in improving shopping experience in recent years, and the most important thing now depends on the creativity and uniqueness of the product.

Some people have commented that in the face of the sluggish clothing industry, clothing brands are facing pformation. Combined with the modern consumer's consumption habits, lifestyle oriented brands will be able to stand out in the fashion retail competition.