Okay, so maybe I put this on off for awhile. I can't believe this has been sitting on my coffee table for over a month already.. Oops!
But this news is too exciting not to share!!
Urban Outfitters to start a wedding brand
By Andrew Maykuth
INQUIRER STAFF WRITER
Aiming to maintain the growth that led to record 2009 sales and profit, Urban Outfitters Inc. today disclosed plans to start another retail brand next year, this one aimed at the $60 billion wedding industry.
The Philadelphia specialty retailer, whose Urban Outfitters and Anthropologie stores target an upscale clientele, said it planned to launch the as-yet-unnamed bridal business by Valentine's Day 2011, first online and later with a store opening.
"We think this is going to be a meaningful business," Glen T. Senk, chief executive officer, told analysts today while reviewing the company's 2009 earnings, which included record sales of $1.9 billion and record profit of $220 million.
"Anybody we talk to about this goes, 'Wow, that's exciting,' " he said.
The idea for creating a brand aimed at weddings - featuring heirloom gowns, accessories, intimate apparel, decor, and gifts - grew out of the company's existing business, which often catered to brides and their entourages, Senk said.
According to the company's research, matrimony means money: The average wedding costs $45,000 to stage, and the bride alone spends $4,500 on clothing and accessories.
Bridalwear is a niche that suffered badly last year in the economic downturn; many high-end boutiques closed.
But for Urban Outfitters, the new line could represent a happy marriage with its long-term strategy to expand sales and profit by nurturing six to eight "meaningful" brands - while not allowing one brand to grow so large that it loses value. Along with Urban Outfitters and Anthropologie, the company operates Free People stores, a Terrain garden center in Glen Mills, and the Leifsdottir wholesale line.
Though the retail industry generally reported strong earnings this year, reflecting a rebound from its 2008 crash, Urban's earnings exceeded analysts' expectations.
Holly Guthrie, an analyst with Boenning & Scattergood Inc., said Urban Outfitters was able to adjust its offerings quickly to the new market conditions.
"They're fast," she said. "They figured it all out."
Sales of $1.9 billion for the year ended Jan. 31 represented a 6 percent increase over 2008. Fourth-quarter sales were up 16 percent, to $589 million. Net income for 2009 rose 10 percent, to $220 million. Quarterly profit of $77.7 million was up 92 percent over the same quarter in 2008.
Despite the snow, Senk said, February sales were also up, indicating that the market for high-end merchandise has been growing.
The company's Internet sales increased from $272 million in 2008 to $324 million last year, 17.7 percent of sales compared with 14.9 percent in 2008, Senk said.
Online sales could amount to more than 30 percent of the company's future business, he said. Urban Outfitters is installing new data-mining software to allow it to target its e-mail-marketing campaigns and to capitalize on its customer base in social networks such as Facebook.
"I don't want to limit how much of our business e-commerce can be," he said.
The company is expanding its European presence and is laying the groundwork to move into the Far East in 2012 or 2013. Senk said he envisioned international sales eventually amounting to 25 percent to 35 percent of the company's business.
Urban Outfitters' stock closed at $34.34 a share today, up 94 cents, or 2.81 percent.
