While Urban Outfitters’ earnings fell in the court quarter, marking the apparel retailer’s second consecutive decline in annual profit, results were still better than expected.
For the period ended 31 January, Urban Outfitters reported a profit of $72.9m, compared with $80.3m a year earlier.
High street clothing retailers have struggled over the last year, not least due to unpredictable weather but also, according to Chief Exec Richard Hayne, due to a shortfall in trends.
“The last major fashion shift was 10 years ago when the skinny bottom returned to popularity,” Hayne said on a conference call on Monday.
“Since then we’ve had all varieties of skinny: low-rise, high-rise, color, black, white and print. Washed, sanded, sliced and destroyed. Yoga and active, leggings, jeggings and stretch.
Today, the customer has a closet full of various skinny bottoms and she has many many long tops and sweaters to go over them. Without a fashion need to drive her purchases, the customer can easily defer her apparel spend. Surely a major fashion shift is the cure for the current apparel malaise. I’m not predicting exactly when that change will come but I’m certain it will.”
Since Urban Outfitters’ sales increased in the non-merchandise categories, such as home and beauty, this helps Hayne’s argument that retailers’ problems lie in fashion and style, rather than competition from market players or e-commerce challenges.
“Obviously all these categories faced the same headwinds so why then was apparel the outlier?” Hayne asked. “To me, the answer is simple. Fashion, or more accurately, the lack thereof.”