Philadelphia-based fashion retailer Urban Outfitters, Inc. has reported a significant decrease in sales for the first quarter of 2020, attributing this decline to the impact of Covid-19-related store closures. The company, which owns various popular brands such as Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters, and Nuuly, saw quarterly sales drop to $588 million from $864 million in the same period last year – a decrease of 31.9%.

The closures of Urban Outfitters’ stores resulted in a 28% decline in comparable retail segment sales. However, the company’s digital channels fared better, experiencing low double-digit growth which helped partially offset the overall sales decline. By brand, comparable retail sales dropped by 19% at Free People, 24% at Urban Outfitters, and 33% at the Anthropologie Group.

In mid-March, Urban Outfitters temporarily closed all of its brand locations across the U.S. due to the pandemic. However, the company has since slowly begun reopening stores in selected locations and currently has operational stores in 26 states. Despite these efforts, the company’s total retail segment sales still declined by 28%, while the wholesale segment experienced a significant 74% decrease. Net income for the quarter also took a hit, with a preliminary loss of $138 million, or $1.41 per diluted share, compared to net income of $33 million, or $0.31 per diluted share, in the same period last year.

Urban Outfitters CEO, Richard A. Hayne, expressed his pride in the company’s teams for their hard work, dedication, and resilience during this challenging period. He also emphasized the actions taken by the company to strengthen its balance sheet and preserve liquidity. These measures included temporarily furloughing employees, reducing leadership compensation, suspending hiring, eliminating bonuses, delaying merit raises, borrowing $220 million, reducing the capital budget by over $100 million, and temporarily suspending rent payments.

Like many retailers, Urban Outfitters has faced numerous challenges due to the Covid-19 pandemic. However, the company remains determined to navigate through this difficult period and ensure its long-term financial stability. With the gradual reopening of stores and the implementation of cost-saving measures, Urban Outfitters aims to weather the storm and emerge stronger once the crisis subsides.

Useful links:
1. https://www.urbanoutfitters.com/
2. https://www.anthropologie.com/