Urban Outfitters Inc. (URBN), the operator of more than 400 stores under brands including Anthropologie, is looking to Amazon.com Inc. (AMZN) as an example as it works to generate half its sales online, said Chief Financial Officer Frank Conforti.
Chief Executive Officer Richard Hayne is “driving the strategy to push us to rethink how we look at that channel and how we think about that opportunity,” Conforti said today at an Oppenheimer & Co. consumer conference in Boston.
“One of the things that he’s pushed me on in the last few months is, ‘I want you to forget about the stores just for a few days and just think about the business as a direct-to-consumer business,’” Conforti said.
Co-founder Hayne, who replaced Glen Senk as CEO in January, has said direct-to-consumer sales may make up “a majority” of Urban’s revenue in as little as five years from about 20 percent in the period ended Jan. 31. Using tactics that have worked for Amazon, the retailer has been investing in technology that helps customers sort through a broad variety of online merchandise and is opening a second distribution center this year that will cut standard shipping to two days or less for more than 80 percent of U.S. customers.
Urban, based in Philadelphia, declined 1.6 percent this year while the Standard & Poor’s Consumer Discretionary Index (S5COND) climbed 11 percent. The shares rose 0.8 percent to $27.11 at the close in New York.
The retailer is looking to recover after profit for the year ended Jan. 31 shrank to a four-year low as its brands boosted discounts to clear inventory.
Urban, which had $2.47 billion of sales in its latest fiscal year, has hired new management since November, including Under Armour Inc. (UA) executive David McCreight as CEO of the Anthropologie brand and Ted Marlow returning as head of the namesake label. Conforti replaced former CFO Eric Artz in April.
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