Failing retailers

FAILING
RETAILERS
ANALYSIS
By Hannah Carter

American Apparel
• The business that started out in 1997 finally went bankrupt in January
2017 bought by a Canadian Apparel company who focus on whole sale,
for $88 million. ‘The courts recently ruled that AA founder and former
CEO Dov Charney will never be able to regain control of the company
he first started’ http://www.highsnobiety.com/2016/02/17/american-apparelhistory/
https://www.theatlantic.com/business/archive/2017/01/american-apparelgildan/513128/
• The retailer began to open branches in many American
neighbourhoods however they lacked research for these areas and
stores began to fail, reports the Los Angeles Times.
http://www.latimes.com/business/la-fi-american-apparel-stores-20170118-story.html

American
Apparel
Strengths
They were known for their
‘Made In America’ slogan which
made customers believe the
authenticity of the brand, also
the fact that they were very
against the use of sweat shops
attracted consumers with the
same ethical beliefs.
Opportunities
To try and sell on line rather
than in stores, as they have
already had to close their high
street stores due to bankruptcy.
The designers could increase
their range of garments in order
to attract more/other
customers.
Weakness’
Their garments don’t offer
many unique designs, all pieces
were designed in a very simple
way with a lot of ‘one size’
descriptions.
Threats
Threats are every other retailer
that sell simple clothing, at
lower prices.

Urban Outfitters
• Urban outfitters is a fashion driven business reaching their steepest
decline in the last 7 years.
• Extortionate prices are becoming less attractive to their young clientele.
• Their declining sales reportedly dropped by 4.9 % ‘in like-for-like sales in
stores that have been open more than a year’.
https://www.retailgazette.co.uk/blog/2017/08/urban-outfitters-posts-worst-results-7-years/
• The huge discounts offered in store ate into the stores margins.
• They need to focus on growing their customer account and improving
their online and mobile marketing.
• Their shares have reportedly fallen by 9% in the past year (Nov 2016)

Urban Outfitters
Strengths
Produce good quality clothing that’s on trend and
desirable to wear.
Well laid out website with authentic looking
photography and models.
Strong advertisement on Instagram and Twitter.
Opportunities
Urban Outfitters have the opportunity to lower their
prices – which is possible because their products
aren’t much better quality than other retailers.
They could reduce their profit margins by a small
amount and be doing better as consumers will be
more likely to buy more products at a time.
Weakness’
The retailers expect their young clientele to pay
extortionate prices for clothes that can be bought in
other retailers.
When the products don’t sell, they use sales to attract
consumers however sometimes they take the plunge
too much so that prices are so low that they loose
more money.
Threats
Threats are other retailers like Topshop, that sell the
same priced products however they do not appeal to
the same target audience nor sell similar products.
On the other hand Urban Outfitters’ clientele may
chose to purchase from authentic vintage stores or
charity shops to try and find similar garments for
lower prices.

New Look
• ‘New Look has confessed to the cardinal sin of retailing – failing to sell what
the customer wants to buy.’ http://www.telegraph.co.uk/business/2017/08/12/can-newlooks-fall-fashion-fixed/
• New look were found that their ethical standards are very poor. In January
factory workers in Leicester were found to be being paid as little as £3 an
hour.
• When visiting the store it is obvious New Look are struggling and falling
behind on trends, their trend research needs to be up to date as it has been
noticed that they have missed out some key trends due to poor trend
forecasting.

New Look
Strengths
Their products appeal to people who aren’t bothered
about being on trend or fashionable as they are a
budget retailer and produce basic clothing.
Opportunities
They have the opportunity to hire a better trend
forecaster. Also they need to produce better
advertisement for example through social media
because that is the main device used by their target
audience, teenagers.
Weakness’
None of their products are on trend which is
unattractive to a lot of consumers because some
clientele will see a garment in the window and be
attracted to buy it, but if there are no eye catching or
on trend garments there is no reason for them to visit
the store.
Threats
Their threats are similar retailers such as H&M, who
do produce on trend garments at the same sort of
price as New Look – but if New Look are lacking the
on trend garments consumers would obviously rather
shop at H&M. Primark could also be seen as a strong
competitor, though their advertisement is not strong,
Primark is a typical place where most people will
result to, to buy cheap clothes.

Current
Financial
Position
Report.
PHILADELPHIA, Aug. 15, 2017 (GLOBE NEWSWIRE) -- Urban Outfitters, Inc.
(NASDAQ:URBN), a leading lifestyle products and services company which
operates a portfolio of global consumer brands comprised of Anthropologie,
BHLDN, Free People, Terrain and Urban Outfitters brands and the Food and
Beverage division, today announced net income of $50 million and $62 million for
the three and six months ended July 31, 2017, respectively. Earnings per diluted
share were $0.44 and $0.54 for the three and six months ended July 31, 2017,
respectively.
Total Company net sales for the second quarter of fiscal 2018 were $873 million, a
2% decrease as compared to the same quarter last year. Comparable Retail
segment net sales, which include the comparable direct-to-consumer channel,
decreased 4.9%. By brand, comparable Retail segment net sales increased 2.9% at
Free People, but decreased 4.0% at the Anthropologie Group and 7.9% at Urban
Outfitters. The decline in comparable Retail segment net sales was due to negative
retail store sales, which was partially offset by continued sales growth in our directto-consumer
channel. Wholesale segment net sales increased 10%.
"While we are disappointed in our second quarter performance, we have a number
of initiatives underway including: speed to customer, international growth,
wholesale expansion and digital investments,” said Richard A. Hayne, Chief
Executive Officer. “We believe these initiatives combined with encouraging fashion
apparel trends could lead to improved topline performance in future quarters,”
finished Mr. Hayne. http://investor.urbn.com/news-releases/news-releasedetails/urbn-reports-q2-results
• This could suggest that Urban Outfitters need to close some of their stores
despite only having 25 in the UK so that they can focus more on online selling,
as this seems to be gaining more success and profits.

Current
Store
Concept
The current store concept is trying to be
edgy with unfinished jobs and a sort of
scruffy interior look. There are no
specialities or new shopping experience
features. The authentic and creative
atmosphere can be welcoming in addition
to the helpful and willing staff who reflect
the brands demographic for a customer.
Improvements
I would introduce new concepts into the
store such as a free personal shopping
service, because I feel that there are so
many different varieties of clothing, that
someone with no idea of their own style or
fashion sense would be very confused.
Therefore personal shopping could really
widen the opportunities of Urban
Outfitters and attract more customers –
especially if its free. And existing
customers will be more likely to buy more !

Current Online/Social Media Presence
• ‘Urban Outfitters' Social Media Strategy Nabs a Striking
Number of Followers’
https://risnews.com/urban-outfitters-social-media-strategy-nabsstriking-number-followers
• Urban Outfitters’ social media profile is up to date and
enticing for their young audience, posting at least everyday,
with outfit ideas and combinations so that consumers will buy
several garments.

Product
offer
Urban Outfitters offer a whole range of unique products
and designs in order to reach all their clientele.
The prices are mid end, however for students some prices
are quite high as most students have limited funds to
spend on clothes.
The actual designs of the garments are suited perfectly to
the clientele.

Consumer
trends of Urban
Outfitters’
demographic
The typical demographic that would suit an urban
outfitters customer are students of ages 18 – 30, men and
women. These people may be student but will live an
affluent, metropolitan lifestyle and have creative and
unique ideas of fashion, alternative style and music taste.
Trends that attract Urban Outfitters demographic are;
Scanning of QR codes with smart phone, young people
know how to use technology and will interact well when
that’s what shopping involves.
The photo booth in Urban Outfitters attracts the younger
audience as it becomes a trend with in schools and
friendship groups, the whole novelty concept.
Urban Outfitters sell a rare selection of American sweets
which again attracts a younger audience as this becomes
fashionable with in groups of young people.

Urban
Outfitters
Shop report
The store has a varied layout with some table and some
rail presentation, which can get quite messy. The vibe is
authentic.