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Urban Outfitters’ CEO Backs Off Catalog Expansion, Embraces Social Media

By Aug 17, 2010

While direct-to-consumer sales among Urban Outfitters’ three brands jumped during its most recent quarter, a previously announced increase in catalog circulation may not have been the cause of the jump (http://directmag.com/catalogretail/news/urban-outfitter-catalog-circulation-0405/?cid=nl_dir_newsline).

The apparel marketer’s second quarter ended with its sales jumping 20% overall, from $458.6 million during second-quarter 2009 to $552.2 million. Its net income rose from $49 million to $71.7 million during the same period. Comparable store sales rose 7% between the two quarters, while direct sales jumped by 36%, from $70.9 million to $96.6 million.

Oddly, CEO Glen T. Senk appeared to retreat from earlier statements about catalog circulation increases. Earlier this year, the company filed Securities and Exchange Commission documents which said, in part, that it was planning boost to its distribution quantities.

As of April, plans called for its Anthropologie brand, which circulated 17.4 million books during fiscal 2010, to boost distribution to 18.4 million in 2010. Its flagship Urban Outfitters line, which put out 12.1 million catalogs in fiscal 2010, was scheduled to increase that run to 13.2 million in fiscal 2011. And its Free People line, which distributed 7.4 million catalogs, was to release 8.2 million copies.

But in its most recent financial report, the company declined to give updates regarding its catalog circulation. Senk was much more coy during an earnings call late Monday, in which he responded to a question about the company’s investment in direct-to-consumer spending by saying it was increasing spending in technology and people, and not necessarily in catalog circulation.

CFO Eric Artz added that the company’s direct sales had been helped by a 28% increase in Web site traffic.

Senk added that in October the company would do the first mailings coordinated by a newly implemented multichannel integration database from Merkle, and that changes in catalog circulation might result from the analysis of those campaigns.

“Right now, circulation plans are to keep them relatively flat,” Senk said.

Senk was more enthusiastic about social media, which he called “a great trend.

“The whole concept behind social media is that have given control for communications to the customer,” Senk said. “It’s not about broadcasting a message, it’s about having a discussion or allowing customers to have discussions with other customers. It’s something we look at on a regular basis.”

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