Urban Outfitters has been in the news quite often recently, but not really for anything it would want to celebrate. Now Urban Outfitters has suffered a major blow.
Shares for Urban Outfitters, Inc. dropped to its lowest levels in two-and-a-half years, according to a report by Bloomberg. Urban Outfitters shares plunged 14 percent during the morning of Oct. 17, getting down to as low as $29.65, which is its biggest decline during the day since January 2012. Shares for the company had already been down 6.8 percent this year.
This is obviously disappointing news for any company but especially one that reported sales were down 10 percent for the company's namesake retailer in its second quarter of this fiscal year. Urban Outfitters, Inc. announced on Oct. 16 that its earnings for this quarter could be negatively affected by lower-than-expected sales.
So things aren't looking so great for Urban Outfitters these days, but the retailer has actually been struggling for a while, and we've all been witness to it. If Urban Outfitters hopes to come out of this rut successfully, here are the issues the retailer should really consider fixing.
Stop making offensive clothing
It seems like nearly everything Urban Outfitters sells ends up in controversy. At the beginning of this year, T-shirts that seemed to glamorize depression and eating disorders caused an outcry. Many criticized the seeminlgy blood-stained Kent State sweatshirt sold in September 2014 for evoking the shooting that killed four people in 1970. If I didn't know any better, I would say the retailer is doing it on purpose.
Actually, it may be. When CEO Ted Marlow joined Urban Outfitters, Inc. in February 2012, he feared that the brand had become "too vanilla." Many of the clothing items the retailer has sold since then have been so not "vanilla" that they've offended the public. While the introduction of these items has definitely gotten Urban Outfitters' name out there, it's been for all of the wrong reasons. Sure, people may know about the brand from these missteps, but they clearly haven't attracted more customers.
Attract an older demographic
During a conference call to discuss the company's fourth-quarter earnings in March, Urban Outfitters CEO Dick Haynes said the brand was restructuring to offer higher-quality merchandise so that it could win back its key demographic of 18 to 28-year-olds. In the past few years, the company has actually attracted more teenage customers. Urban Outfitters desperately needs to learn how to appeal to an older demographic again because right now, its products are too expensive for the type of customers it's attracting.
However, the teenage market isn't a bad one to be in. High Street retailers such as H&M and Forever 21 do very well among this demographic and also attract customers in Urban Outfitters' desired older age range. But if Urban Outfitters wants a chance of competing with them, it needs to sell more affordable items beyond just its sale section.
Be more inclusive
If you're looking for plus-size fashion, Urban Outfitters is not for you. The largest size available is a 12, which is just not going to serve plus-size customers very well at all. They will instead head to other major retailers that sell plus-size clothing, such as Gap, H&M, Forever 21 and Old Navy. Not to mention, there are so many online plus-size fashion retailers out there today. All of this is to say Urban Outfitters is missing out on a major consumer base. The world is becoming more inclusive for all body types, and Urban Outfitters should be, too.
Up your digital game
Urban Outfitters is a store that has a very kitschy appearance that relies on customers stumbling upon quirky items, like all of those books and knickknacks it sells. However, as online shopping becomes more and more lucrative, a brick and mortar store's appearance doesn't need to look as great. Sure, Urban Outfitters still has to have a cool vibe, but it should really consider new and better ways of engaging customers digitally and attracting them to its online store.Online shopping retailers such as ASOS and Modcloth have become extremely popular due to their active engagement with online customers. Figuring out a way to drive consumers to online shopping may just hold the key to revitalizing the brand.