Brocker.Org: Urban Outfitters is more mainstream than ever — now it’s struggling to stay relevant

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Once known as the retail mecca for hipsters and alternative
fashion lovers, Urban Outfitters is now ubiquitous — and
struggling to stay relevant as a result.

The store, which sells clothing inspired by the bohemian,
kitschy, and vintage styles, has long attracted
customers (generally teens and people in their early
twenties) looking for a more alternative look.

Interest in the style led to the brand’s rapid expansion
— Urban Outfitters’ sales grew
by 44% percent
between 2003 and 2006. As of 2016, the
company had
240 stores
across North America and Europe.

“For many years, they were the cool place,” Jan Rogers
Kniffen, a retail analyst specializing in brand investment,
told Business Insider. Known for its destructed denim jackets,
ironic sweatshirts, and kitschy knickknacks such as Polaroid
cameras, the store was essentially the mass-produced version of
the thriftstore find.

But despite
a surge in store openings
 in 2012, shares of the
retailer have been
dropping consistently
over the last two financial quarters.
From July to September 2016, sales at the store
fell by nearly 8 percent
, which CEO Richard Hayne admitted
was caused by too many stores.

“This created a bubble, and like housing, that bubble has
now burst,” he said. “We are seeing the results: Doors shuttering
and rents retreating.”

 

“There was a big boom when places like Williamsburg and
Greenpoint were starting to happen,” said Eila Mell, a
fashion consultant and author of a book on the TV show “Project
Runway,” told Business Insider. “A lot of people were interested
in the hipster look.”


Urban Outfitters
Urban
Outfitters


Urban Outfitters did not respond to Business Insider’s
request for comment. 

Both Kniffen and Mell said that
the nationwide trend
of brands closing down stores
to focus on online shopping has contributed to this decline
in sales.
But with the decline of the hipster trend
and the store’s rapid expansion, Urban
Outfitters is also struggling to hold onto
the consumer base that once sought it out for
cool pieces.

“That’s clearly where they started out. They were the urban
cool, they only had a few pieces of each item,” Kniffen said,
adding that at a certain point the brand’s tendency to open
stores in old bank buildings and warehouses set it apart
from other brands.

As the years went by, Urban Outfitters has also been
embroiled in a number of controversies — from
accusations
of copying designs from individual artists
to pieces that
evoked associations
with the Holocaust and a
trademark battle
with the Navajo Nation. Still, the
brand has — until recently — continued to attract a
customer base of young shoppers looking for hipster-style
pieces. 

“Some people just want to shop there,” Mell said,
clarifying that changing trends would not dissolve the
brand’s key consumer base. “I don’t think it’s going to
discourage them.” 

Even though the brand’s CEO has 
repeatedly
said

that “big is the enemy of cool,” Urban Outfitters
opened numerous locations in suburban malls and watched
its once-edgy aesthetic get absorbed into the
mainstream.

Once flannel and skinny jeans became
available at other stores, mass-retailers such as Forever 21
and H&M quickly became Urban Outfitters’ competition.

“[H&M and Forever 21] are also very fashionable
and they appeal to consumers that would be shopping at Urban
Outfitters,” Kniffen said. “It makes that business so much harder
to be successful in.”
 

But he also does not expect Urban Outfitters —
particularly its upscale sister brands such as
Anthropologie, Free People, and Terrain — to go away any
time soon.

“The consumer once saw them as unique,” said Kniffen. “As
you grow, you become bigger and it’s harder to maintain
that.”

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