Urban Outfitters Shares Are Crashing -- Here Are The Biggest Problems With The Brand

Urban Outfitters Herald Square 6Business Insider/Hayley PetersonRecent efforts to redesign stores have done little to bring in Urban Outfitters customers.

Urban Outfitters shares are crashing up to 15% after the retailer revealed that sales at its namesake brand are continuing to plunge.

The company’s third-quarter earnings could be negatively affected by disappointing sales, Urban said in a news release yesterday . Sales fell 10% last quarter.

Earlier this year, company executives identified several major problems in an earnings call with investors.

Here are the biggest issues facing the brand right now.

Fashion misses. Urban Outfitters needs to sell hip, trendy apparel in order to bring in customers. But Urban Outfitters’ latest offerings have been more obscure than hip. Take this bizarre bear coat from December, which retailed for $US200. Urban’s fitness brand, created in response to the popularity of brands like Lululemon, was criticised for being overpriced and skimpy.

Off-pitch marketing.Urban Outfitters markets to teen customers. Unfortunately, those customers are price-conscious and would rather shop at fast-fashion brands like Forever 21 and H&M, writes Miriam Gottfriedat The Wall Street Journal. In order to turn business around, Urban Outfitters will have to resonate with older customers who are in college and beyond. Urban Outfitters CEO Richard Hayne said that the brand plans to improve store displays and advertisements.

Creative execution. Urban Outfitters is known for pushing the envelope. This year, however, the brand missed the mark. The brand was forced to pull a “Depression” t-shirt after customers expressed outrage. Urban Outfitters also pulled a shirt depicting “drunk” Jesus. These incidents eroded consumer perception in Urban’s brand.

Hayne said that the brand is working to fix fashion assortments and get customers back in stores.

Urban Outfitters appointed Trish Donnelly as president of its North American brand earlier this year.

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