HRM1101 – Corporate Analysis Assignment Your name: Maggie Scanlon
Company Studied Name of company studied
Articles you read about each company (online or print)
Anderson, George. “Wall Street Spooked by Urban Outfitter CEO’s Resignation.” Retail Wire. 11 January 2012. Bradie, Lee. “Four CEOs that Impress Jim Cramer.” CNBC. 20 August 2013. Company Profile Urban Outfitters, Inc. Market Line. 23 December 2013. "Calvert Investments: Investors: Move to Install Wife of Urban Outfitters CEO Should Not Deter Support for Vote On Board Diversity." India Retail News 5 June 2013. Business Insights: Global. Web. 26 Sept. 2013. "Hayne's Pay At Urban Up, But Only To $33K." WWD: Women's Wear Daily 205.67 (2013): 3-1. Business Source Premier. Web. 26 Sept. 2013. Hayne, Richard. Forbes.com. September 2013. Passman, Aaron. "Targeting Niche Markets With Specific Products." Credit Union Journal 17.28 (2013): 14. Business Source Premier. Web. 26 Sept. 2013. Sauers, Jenna. “What’s Wrong with Urban Outfitters?” Jezebel. 12 January 2012. “The Head Coach Matters: Cramer.” Mad Money. 20 August 2013. "Urban Outfitters Posts Record Q2 Net." WWD: Women's Wear Daily 206.36 (2013): 2-1. Business Source Premier. Web. 26 Sept. 2013. "Urban Outfitters Puts Focus On Web." WWD: Women's Wear Daily 205.51 (2013): 2-1. Business Source Premier. Web. 26 Sept. 2013.
HRM1101 – Corporate Analysis Assignment
“URBN, Inc. Company Profile” www.Urbn.com “Urban Outfitters Inc.” Business Insights: Global. "Urban Outfitters Investors Urged To Support Shareholder Measure #4 To Open the URBN Boardroom to Women and Minorities." Investment Weekly News 28 May 2011: 1139. Business Insights: Global. Web. 26 Sept. 2013. Van Allen, Peter. “Urban Outfitters’ Returning Leader Viewed Positively.” Philadelphia Business Journal. 13 January 2013. Number of countries the company does business in
5000 South Broad St. Philadelphia, PA 19112
Number of employees
Gross Revenue in most recent year available
2,473.8 Million (In 2012)
Names of the Chairman of the Board, CEO, President, CFO
Chairman of the Board, President, CEO: Richard A. Hayne President, Free People: Margaret A. Hayne President, Terrain: Wendy B. McDevitt CFO: Frank J. Conforti
How is the company leadership described? Are they competent, admired, respected, etc.? **
The company’s leadership in last few years has been uncertain and shaky. The former CEO Glen Senk was not taking the company in the direction it needed to go. Revenue was starting to drop as well as stock. The brand seemed to be getting lazy and focusing on knock-offs instead of the unique and trend- setting image the company was built on. As bad as things seemed to be going, they got worse. The URBN, INC. Company suffered a 15% drop in stock after Senk resigned from the CEO position in January 2012. The founder of the company, Richard Hayne stepped up to take the position. There were mixed emotions from critics about this leadership change. Some thought he could usher in the “big company” era that URBN needed to take on. Others believed he would get the company back to its roots. They focused on his expertise being people focused opposed to the expertise as a merchant that Senk had. Hayes also has a large incentive to succeed because of his 22% stake in the
HRM1101 – Corporate Analysis Assignment company. Recently, Cramer talked about Hayes on a Mad Money episode about Four CEO’s that impress him. Cramer gave only praise to the new leadership, and said that the recent 38% increase in stock from the Free People share of URBN was unheard of. Cramer also said that Hayes took a big company that had stumbled and “reignited the business.” Some of his greatest praise of the CEO were when he said that URBN stores were not just stores they were experiences all their own. He also said that Hayes had developed a “cherished brand.” Key Products/Services **
The URBN, inc. Company can be broken up into several distinct stores. The three most prominent branches being: Urban Outfitters, Free People, and Anthropology. Each store has its own unique atmosphere, décor, clothing style, and customer base. The distinct styles make the URBN Company more marketable to a larger span of people. Urban Outfitters is directed at young adults aged 18 to 28 through its unique merchandise mix and compelling store environment. They offer women’s clothes, shoes, and accessories. Their prices are lower than other divisions. They are one of the only branches of URBN that offer men’s clothes and shoes. They also offer home goods. Directed at college students and in metropolitan areas. Free People targets young contemporary women aged 25 to 30. This store offers more of a selection for the “free spirit.” They offer women’s clothes, shoes, intimates, and accessories. There is a bohemian vibe to the clothing. The price range is higher than Urban Outfitters. When Richard Hayes was a hippie back in 1970, he founded Free People, which spawned the whole company. Anthropology targets sophisticated and contemporary women aged 28 to 45. They have capitalized on the turn in the housing market with a wide variety of home goods. The style of this brand is a more modest style and upscale in price. They offer women’s clothing, accessories, and home goods. The less known companies are Terrain and BHLDN. Terrain offers home and gardening products and BHLDN offers wedding apparel and accessories.
Three adjectives that describe the company in the marketplace **
The URBN Company offers unique and desirable products. It differentiates itself from the rest in this way. URBN targets niche markets specifically for college students, but each store offers its own unique taste and caters to a different individual. Going into a URBN store is an experience in itself. The URBN Company can also be described as Global and expanding. Although most of its business happens in the US,
HRM1101 – Corporate Analysis Assignment URBN does business in 140 countries through catalogues, ecommerce, and some direct stores. They are looking to expand into the Asian market with acquisitions in Hong Kong and China in the near future. They also plan to open 16 Urban Outfitters, 9 Anthropology, and 14 Free People stores in the US and in Europe by 2014. Richard Hayes says that his company is, “In the very early stages of realizing that worldwide potential each brand possesses.” URBN may not be the leader in low prices, but they do a great job competing. Because the brand is targeted at college students, the prices are kept low and there are constantly sales. URBN makes it affordable to still dress trendy and look fashionable and unique. What is their stock price? What was it 6 months ago? What is causing the rise or fall? **
The stock price today is $36.98. Six months ago the price was $39.14. The price has been up and down for the past couple months. It took a sharp decline in June, rebuilt, and then took another sharp decline in September. The stock is currently on its way back up though. The fall in stock is not only being experienced by URBN, Inc. Retail companies in general are experiencing loss just like URBN. This can be attributed to the sluggish economy and changing shopping trends. Shoppers have been lowering their spending and are trying to only shop during discounted sales. Additionally, low interest rates are attracting possible customers to spend money on cars and houses. This is making them hold back on apparel purchases. Despite the recent drop in the market, analysts are optimistic about the future of URBN, Inc. They are saying that the long-term outlook is good as long as brand strength and direct-to-consumer channel remain intact. The company’s expansion into the international market and utilization of the Internet also makes it a favorable.
Describe the company’s culture **
The Culture of the URBN Company is creative and collaborative. People are very team oriented and flexible. People who work here are passionate and driven. They put their heat and soul into their work and believe in the brand. There is not a lot of management to answer to, and in that way, it would be more of a flat organization. There are a lot of diverse people working in the company itself. These people are able to play off ideas with each other, but there is no diversity within the board of directors. The Board was recently heavily criticized for the lack of diversity. A main concern was that there was not one woman on a board that sells to primarily woman. The board combatted this problem by instating Margaret
HRM1101 – Corporate Analysis Assignment Hayes, Richard Haye’s wife and president of Free People, to the board. Many were still upset by their decision because it seemed more of a symbolic motion just to try to please the public. In an increasingly complex environment, it is vial to have diversity on a board. Diversity allows for a wide range of viewpoints, skills, experiences, and ideas to better market a product. Past employees on glassdoor.com describe URBN as a fun work environment where one gets to meet “cool people.” The campus where one works is beautiful and there is a lot of freedom including an informal dress code. The managers are also great and do a lot for employees such as a “summer party, huge Christmas party, dogs at work, shuttle, bikes for using around campus.” The cons of working for URBN is that the pay is not very good and long hours are often necessary. Describe the company’s values **
On the URBN company’s own profile page, they list several adjectives that describe the company and what they stand for: “Savvy, Connected, Authentic, Dynamic, Fun, Modern, Timeless, Inventive, Inspirational, Relaxed, Positive, Hip, Fast-Paced, Unconventional, Energetic, Unique, Rhythmic, Growing, Value Conscious.” The URBN team also values hard work and passion highly. Only the most driven and committed people get hired here. The site also says, “Our customers are the reason and inspiration for everything we do.” This shows that they value customers and customer service highly. This can be seen in the stores in particular. Sales associates are trained to greet every customer and ask if they can be of assistance. They are always friendly and welcoming, which adds to the atmosphere and the overall experience of the stores. The company also values freedom of expression and creativity. This can be seen in their designers and the atmosphere of their headquarters. The value on expressions and creativity is passed down to their customers. People who shop at URBN companies are very unique and value freedom of expression highly. URBN clothes make someone stand out and allows them show their personality through what they are wearing.
Describe in detail information from Chapter 5 and Chapter 9 as it relates to this company **
Currently URBN is implementing a long-term plan and growth strategy to expand into international countries such as Asia, and they are working on expanding further in Europe and America. This is a strategy to help achieve their vision of “enjoying and achieving aggressive and controlled growth.” The company utilizes a more flat structure, and they are like the starfish in the way they promote flexibility and creativity. The competitive advantage of URBN is its unique style and trendy clothes. The different companies focus on Niche strategies. Each
HRM1101 – Corporate Analysis Assignment brand has its own targeted customer. The company is also defined as a For-Profit organization. Profits matter, especially to the shareholders. The company has recently become very dependent on environmental scanning because of the change in economic conditions, the change in technology, and the increase in competition. They have been relatively successful in combating the changes and have even come to prosper from them. These threats can be see in the URBN SWOT analysis that is published online for the public to see. In the URBN organization, there is decentralization of decision making especially in the creative department. Freethinking is encouraged and people are expected to come up with creative ideas. Although there is so much flexibility of decision-making and creativity, URBN still has a relatively high degree of specialization and product departmentalization. People are put into categories. For example, there are buyers of shoes, buyers of necklaces, buyers of dresses, and these employees do not stray from their distinct job function. The Human Resource manager’s roll is very important for this company. They rely on highly passionate and creative people to drive the company forward. Without the HR manager on task with a plan for picking the “right” employees, the company would crumble. Major business challenges facing the company **
Looking at the SWOT analysis done by the company and posted online, there are a few challenges that URBN faces. Their major weakness at the moment is that their geographic concentration in the US can limit possibilities for expansion. They are focused on American style because that is where most of their companies are located. This style does not always translate to other countries and cultures though. Another challenge would be the intense competition. Retail is a very competitive market and it takes a lot of research and strategy to stay relevant. While targeting college students, price of products is also a huge factor. URBN is often forced to lower prices to compete with other companies but this lowers profitability for the company. Another challenge for URBN is that the environment is unstable right now. There is economic uncertainty and a change in technology through the e-commerce revolution. The extraordinary rate of change brings both significant risk and opportunity. It is up to the leadership of URBN to stay on track, get innovative, and take advantage of the expanding market.
HRM1101 – Corporate Analysis Assignment Internet presence – is it effective? Please describe. **
The Internet presence for URBN is very effective. In the past year the e-commerce revolution helped boost profits by double. Like the division of the stores, each brand within URBN has its own website which is tailored to the ideal customer for that brand. Each website is as unique as the stores and the products it offers. Free People even recently designed “Free People Me.” This made their website interactive and allowed customers to favorite items and make collections of their favorite products offered. Having products on the Internet helps URBN reach the international markets and the people who do not live near a physical store. The presence in multiple sales channels (In store, catalogues, and websites) increases the customer base by making products more accessible. This in turn increases brand name recall and most importantly increases sales revenue. There is a lot of room for improvement and growth online for this company. They have recently produced their own app for Free People and Urban Outfitters, which was a smart move. The apps as well as the Internet sites have increased total revenue by 8.8% compared to last year.
Advertising in other media – is it effective? Please describe. **
The URBN brand does not advertise on television or even in magazines. They do all of their advertising on social media such as Instagram. Free People especially promotes their clothes by holding instagram contests for people to send in pictures of themselves representing the Free People brand by wearing the clothes. This gets the free people style out through individual people to all of their followers. Free People also posts pictures of their stylists wearing the latest products in the stores. Advertising sales is also a big feature of the various URBN brands’ Instagram photos. These companies rely heavily on the revenue brought in by these sales. It allows them to compete with competitor’s prices in the marketplace. A lot of people come out to buy during these sales due to economic factors and because most of the customers are college students. From a marketing standpoint, URBN should be doing more to get their brand name out. They should utilize fashion magazines and hold public events to get people excited about the brands. Most people only know about one of the brands if they live by one. Other people who know about the stores generally know through word of mouth and then looking at the websites. There should be more effort to make the company name bigger.
What are their target customer demographics? **
The target customer demographics change for each brand within URBN. The three main brands being: Urban Outfitters, Free People, and Anthropology. Terrain and BHLDH are also brands offered.
HRM1101 – Corporate Analysis Assignment The target demographic for Urban Outfitters would be age 18-28 with a focus on hip and trendy college students. Their clothing tends to have more of an edge to it, and their prices are affordable. They also offer men’s clothing and accessories. They can often be described as “hipster” clothes. These stores are mainly seen in metropolitan areas, near college campuses, in specialty centers, and in enclosed malls. Free People targets contemporary women age 25-30. Their customer would be a free spirit. Richard Hayes started free People in 1970 when he was a hippie. The style from that time period can be seen mirrored in the contemporary style of the clothes today. Free People stores are seen mostly in upscale street locations, enclosed shopping centers, and specialty retail centers. Anthropology targets sophisticated women age 28-48. They offer an eclectic style of clothing and accessories and offer unique home goods. Stores can be seen in upscale street locations, specialty centers, and enclosed malls. Terrain appeals to, “Men and women interested in a creative, sophisticated outdoor living and gardening.” They create a unique shopping experience through large freestanding sites inspired by greenhouses. They offer “Lifestyle home and garden products, antiques, live plants, flowers, wellness products and accessories.” There are only two locations, but they both offer a restaurant and coffee bar. BHLDH is a wedding store. It, “Offers a curated collection of heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie and decorations.” There are only two stores located in upscale environments. Does this company have a presence on Facebook? If so, how is it used? **
This company has a presence on Facebook, twitter, and Instagram. The brand with the largest social media presence is Free People. They constantly post pictures of their stylists in unique outfits at their stores. They also post pictures advertising sales, promotions, and competitions. Free People constantly has photo contests for the best outfit. They also give new catalogue sneak peeks. These photos promote brand awareness on social media and get the company name out. Free People also has a blog that they post things from DIY to fashion advice on. Urban outfitters is not as prominent on social media. They show clothes on their Facebook and mainly use these resources to promote sales. Promoting sales is very important to the Urban Outfitters brand because they do target college students. Their target market is always looking for the lowest prices. It is their way of keeping up with competitors. Anthropology does not have a Facebook page, but they have a twitter and an Instagram. This would be the case because they
HRM1101 – Corporate Analysis Assignment target more of a sophisticated audience. They do not rely on social media as heavily because some of the clientele is not even on any of the social media sites. Describe their reputation in the marketplace based on research you conduct. **
The URBN, Inc. company has a reputation as a leader in the marketplace. They were able to stay relevant and keep sales up despite the economic recession in recent years. Environmental uncertainty has even spurred their forward movement into international territory and e-commerce. Despite severe competition, the URBN companies is able to offer a unique product that goes above and beyond what competitors have to offer. People are willing to spend a little extra money because the URBN brands are synonymous with quality and uniqueness of product. As Cramer said, URBN is a “Cherished brand.” Their focus on customer relationships and expansion has made them a brand to watch. The only flaw with the URBN reputation would be its few run ins with activists. Some of Urban Outfitters’s products that were meant to be light-hearted jokes have enraged groups such as the Navajo Nation, the Latin Community, the LGBT organization, and the Anti-Defamation League. Their evasion of integrating women and minorities onto its board has also made the public question the leadership of the company.
Find 3 people from this company that are on Linked In. Find at least one person who is in Human Resources or Recruiting. List the names of the three people, their title and where they received their undergraduate degree.
Liz Freet: Talent Recruitment Manager for new stores and special projects at Urban Outfitters. –Orange Coast College Moira Gregonis: Senior Marketing Manager at Urban Outfitters - Gerrit Rietveld Academie Amsterdam Lauren MacSorley: Talent Acquisition at Urban Outfitters -Mount Saint Mary’s College
Who are their major competitors? **
Retail is a highly competitive environment. The main competitors of URBN are Abercrombie & Fitch Co., American Eagle Outfitters, The Gap, and H&M. The main problem URBN faces is that it currently has a limited geographic presence. Although the company is working on this issue, they currently serve a more limited customer base than most of their competitors. The competitors companies have a wide geographic presence in most cases and therefore have a wider customer base and have more name recognition.
HRM1101 – Corporate Analysis Assignment The intense competition often puts pressure on URBN to lower prices to attract customers to meet their competitor’s level. This in turn can affect profitability. Other companies are able to have lower prices because a lot of their products tend to be made unethically overseas. URBN has code of ethics called the California Transparency in Supply Chains Act. They are, “Committed to conducting business in a lawful, ethical, and responsible manner.” They have put in place a code of conduct that holds their supplier accountable for ethics, which include the absence of child labor, forced labor, and discrimination, and instead promises fair wages. Using this ethics principle, products will be more expensive. Would you like to work for this company? Why or why not? **
It is my dream job to do marketing or buying for this company. I want to work in a creative environment for a company that I believe whole-heartedly in. I believe in the unique style, presentation, and individuality that the clothes and stores of URBN, Inc. present. I want to get into fashion marketing because I love fashion. Fashion is what allows people to stand out in a crowd and express themselves. The URBN, Inc. company creates an environment that allows creativity to prosper. Their informal work environment promotes people to dress how they want and not in stuffy business clothes. Reviews from previous and employees say that the work is demanding and the pay is not that great. I am not one to get caught up in how much money I make. I just want to work for my favorite company and a company I believe in. I believe this is the company that will allow me to “never work a day in my life” just based on how much I will enjoy it. URBN is also an expanding company with big opportunities coming up in the near future. International development and expansion of e-commerce are just a few of the aspects of URBN that excite me as a marketing major. I would love to take on the challenge with this company because it has great potential.
Would you invest in this company? Why or why not? **
At this point in time I would invest in this company. Although they have recently faced some losses in the stock market, the stock is on a rebound and predicted to rebound and do great in the next few months. With the new leadership in place to take the company in the right direction, there should be nothing but gains. The global and domestic expansion of the URBN brand is something that will be a good thing for the brand and for sales. With plans for almost 40 new stores to open up both in the US and internationally, the URBN brand is taking big steps to get their company competing on a larger scale. Plans for the development of URBN stores in the Asian market could also open up a whole new
HRM1101 â€“ Corporate Analysis Assignment market for the brand. The utilization of the Internet for sales has also ignited within the last year. The E-commerce revolution helped URBN drive up profits by double in the past year. Urban Outfitters and Free People have also just recently launched their very own smart phone app. This will boot sales and gives users the ability to browse merchandise at any time. Richard Hayes has big plans for this year. He is planning on putting money into bringing in more talent, upping their market share, and sharpening the companyâ€™s technological capabilities. What would you do differently if you were CEO? **
If I were the CEO, I would put more energy into marketing and advertisement. Commercials for URBN companies are never on TV, and are not in magazines really either. The company relies mostly on word of mouth and reliable customers. The brand is so unique and has enough separate divisions that everyone can find the brand that they identify with the best. I would also be more aggressive in trying to move further into the global market. I would utilize the Asian market and expand the URBN reach further into Europe. I would also work to expand the brand at home to make it more accessible no matter where one may live. Lastly, I would work harder to get URBN brand clothing other than Free People into department stores such as Bloomingdales and Lord & Taylor. Getting a brand into a department store promotes brand name recognition and increases revenue through more locations for sales. The other bands are capable of holding their own in the department stores too.