Urban Outfitters plans 30–32 new stores this year

Compiled by the staff of Shopping Centers Today

Some of Urban Outfitters' stores are bringing in annual sales of $1,700 per square foot, but the retail conglomerate is not resting on those laurels, CFO John Kyees told investors in New York City yesterday. In fact, “at some stores we have no choice but to open new stores and cannibalize the old ones, because we don't want to keep our customers standing in line,” he said.

Starting next April the Philadelphia-based company will roll out new cash registers at its Anthropologie, Free People and Urban Outfitters stores to help speed those long lines up. The company will also eliminate electronic tags in many high-volume stores, because they slow the checkout process when sales clerks have to remove them.

For the year ended Jan. 1, 2005, Urban Outfitters' comp-store sales grew 13 percent, said Kyees. “We had to create a new five-year business plan because we did so well in fiscal 2005,” he added. That new plan includes 30–32 new Anthropologie and Urban Outfitters stores this year, with the majority of Anthropologie stores going into lifestyle centers and the Urban Outfitters stores going into 'A' malls, he said.

The new stores will be 10 percent smaller than existing ones, because they will not need the extra selling space. New Urban Outfitters units will average 9,000 square feet and new Anthropologie stores will average 7,500 square feet, he said.

The future is also bright at the company's Free People division, which currently operates only two stores in addition to a wholesale operation, Kyees said. Bloomingdale's and Nordstrom both sell Free People apparel at in-store boutiques and have said the brand is the most profitable contemporary line of clothing they sell, he added.

“[At] the only Free People store that's been open more than a minute, the Garden State Plaza mall store in Paramus, N.J., sales are at $800 per square foot, and the store comped 40 percent in our first quarter 2006,” Kyees said.

Urban Outfitters will open two or three new Free People stores this year and six to eight next year, Kyees said. After that, the company will evaluate whether the brand will remain largely wholesale or whether it will pursue a U.S. rollout.