Sunday, February 3, 2013

Urban Outfitters: myths surround successful retailer

Urban Outfitters has come to London, Ontario. According to the local paper, this is "the first store it has opened west of Toronto." It isn't. There are already outlets in Vancouver, Edmonton and Calgary, and I expect there will be a lot more both east and west of Toronto in the near future. UO is in expansion mode, opening 21 new stores in 2011 and an additional 16 in 2012.

The Philadelphia-based retailer does not "shun malls"; This is a myth. Richard Hayne, the brilliant businessman behind Urban Outfitters, realized years ago that placing stores only in downtowns or urban areas was a dead end approach. He branched out into enclosed malls and lifestyle shopping centers, ensuring that his stores attracted the target market -- those between 18 and 30.

Once ubiquitous; Now, gone.
If you don't agree that Hayne is a brilliant business man. Consider this: He has kept a retail operation going for 43 years. This is no  small feat. Selling stuff, at least selling lots and lots of stuff year after year, decade after decade, is hard. Think of all the chains that once rode the crest of popularity only to fall, fail and fade: Tabi International, Au Coton, Beaver Canoe, Cotton Ginny . . .

Hayne got into retail with his first wife Judy Wicks in 1970, opening the Free People's Store near the University of Pennsylvania campus in Philadelphia. A pair of  old-fashioned men's long johns hung on the front door and during store hours the rear flap would be unbuttoned to display a sign reading "OPEN."

Despite what one often reads, Hayne was not hippie retailer. Reporter Jonathan Valania makes this clear in a story he wrote for Philadelphia Weekly: Clothes Make the Man.  In those early years, Hayne had long hair and he was against the war in Vietnam, but at that time who didn't and who wasn't? He was simply in tune with the era.

As the era ended and the tune changed, so did Hayne and his store -- it was now his store as he and his wife had separated in '71. Free People's Store became Urban Outfitters, stocked with an eclectic mix of merchandise for the chic, young urbanite. Urban Outfitters, under the guidance of Hayne, sold more than just stuff, it sold "cool." But, sometimes selling cool buys problems.

(Zach Klein - courtesy Zach Klein, Flickr)

  • The Anti-Defamation League got its dander up in 2005 over a T-shirt sold by Urban Outfitters that said "New Mexico, cleaner than regular Mexico."
  • The Navajo Nation sued for trademark infringement after the company sold items labeled as “Navajo,” suggesting the merchandise was made by the tribe when it was not. Under the federal Indian Arts and Crafts Act, making such a false claim is illegal.
  • At various times the company has angered the Jewish community, gays and the Ancient Order of Hibernians in America. The Irish group protested a T-shirt saying, "Kiss me. I'm drunk or Irish, or whatever."

UO even managed to offend transgendered folk with a card advertised as "charming" containing the word "tranny." A slang term considered insulting and degrading by the transgendered community.

It isn't always easy being hip. And my guess is the company has had some big failures in the area of cool because at its corporate core it is not cool. It is a business. A successful business.

But don't make the mistake Buzzfeed makes, reporting that Urban Outfitters is run by a bunch of lame old men. Richard Hayne is a senior but he is not lame. His personal politics may be far right, years ago he and his present wife donated money to Rick Santorum, but today he keep his politics and his businesses separate.  Urban Outfitters shows more interest in Twitter, Tumblr, Vimeo, Pinterest, YouTube and the UO Blog than the Republican party and right wing causes.

The London Free Press interviews one young shopper who says, "It's cool, it's trendy and I am just glad I don’t have to go into a mall." --- at least not for the moment.

Let's be honest, Urban Outfitters is not about being cool or being chic but it's about making money. Clearly, UO believes there is more money to be made locating at the far north end of Richmond Row, a location that puts them close to the university crowd.

Despite the claims of the chief executive of Downtown London, the American retailer didn't choose London's core. Nor did it choose one of London's large malls. Yet, for many retailers the malls and big box developments are where the shopping action is in London.

So let's cut to the chase: Urban Outfitters is a global, multi-brand empire encompassing not only Urban Outfitters but Anthropologie, Free People, Terrain Garden Center and BHLDN (a wedding store). It had an increase in annual sales in 2012 of nine percent over the previous year. Since taking back the reins of control in early 2012, the stock under Hayne's leadership has risen 34 percent. 

Will the London store succeed? Maybe. But Urban Outfitters, like other chains, is not adverse to closing a store if the location doesn't deliver. Roots closed their store on Richmond Row. The once popular, locally owned Muskox, selling such iconic brands as Royal Robbins, is gone. The Richmond Row mystic attracted but failed to hold on to these and other stores.

The biggest threat to the future of the London store may simply be the age of  the savvy Richard Hayne. He will not be around to work his retail magic forever.

For an interesting take on what it is like to work, more often than not part-time, for a big chain, read:
A Part-Time Life, as Hours Shrink and Shift by Steve Greenhouse in The New York Times.

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