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3 Things Urban Outfitters Must Fix to Save URBN Stock

URBN stock has a tough road ahead


Sales at Urban Outfitters‘ (URBN) namesake brand are continuing to slide, and URBN stock has taken a hit as a result.

The retailed reported a decline of 12% at Urban Outfitters stores in the first quarter. Sales also fell last year.

The company identified several major problems in its earnings call earlier this month.

  1. Fashion misses. Urban Outfitters needs to sell hip, trendy apparel in order to bring in customers. But Urban Outfitters’ latest offerings have been more obscure than hip. Take this bizarre bear coat from December, which retailed for $200. Urban’s new fitness brand, created in response to the popularity of brands like Lululemon, was criticized for being overpriced and skimpy.
  2. Off-pitch marketing. Urban Outfitters markets to teen customers. Unfortunately, those customers are price-conscious and would rather shop at fast-fashion brands like Forever 21 and H&M, writes Miriam Gottfried in The Wall Street Journal. In order to turn business around, Urban Outfitters will have to resonate with older customers who are in college and beyond. Urban Outfitters CEO Richard Hayne said that the brand plans to improve store displays and advertisements. 
  3. Creative execution. Urban Outfitters is known for pushing the envelope. This year, however, the brand missed the mark. The brand was forced to pull a “Depression” t-shirt after customers expressed outrage. Urban Outfitters also pulled a shirt depicting “drunk” Jesus. These incidents eroded consumer perception in Urban’s brand.

Hayne said that the brand is working to fix fashion assortments and get customers back in stores. He expects business to improve by the fall.

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