Anthropologie’s holiday sales results are in and…

Urban Outfitters, Anthropologie’s parent company, has released its earnings results for the Holiday 2015 shopping period…and they are probably no surprise to the community.

From the press release:

“Total Company net sales for the two months were flat over the same period last year. Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, decreased 2%. Comparable Retail segment net sales increased 2% at Free People and decreased 2% at Urban Outfitters and the Anthropologie Group, respectively.  Wholesale segment net sales increased 40% partially due to delayed shipments from the third quarter carrying over into the fourth quarter.  The Company is now current on all Wholesale segment shipments and does not anticipate any further delays. 

“We continued to experience strong direct-to-consumer growth at all our Brands during this Holiday season,” said Richard A. Hayne, Chief Executive Officer. “These gains were offset by weaker store sales which we believe was driven by declining store traffic.  Highly effective inventory management by our merchant teams will leave us with clean inventories heading into the spring season,” finished Mr. Hayne. 

For the eleven months ended December 31, 2015, total Company net sales increased 4% over the same period last year. Comparable Retail segment net sales increased 2%. Wholesale segment net sales increased 15%.”

Let’s discuss. First, I don’t think any of us are surprised to hear that Anthropologie’s sales were down a bit…we saw way too many promotions during the holiday period to feel that the company was doing gangbusters. Direct to consumer sales (i.e. their website and app and ahem this blog!) were up a bit, which is great news.

I think there is a paradox of sorts going on here. Anthropologie saw weaker foot traffic this year in-store than they did in 2014. And I know the execs are going to talk about the product being weak and needing more hooks to drive people into the stores, which I do agree with.

However, I think the biggest problem Anthropologie has right now — and this one is a tough one to quantify and fix — is that they don’t have the right products in-store right now nor do they have enough product in-store.

– There are way too many online exclusive items.
– There are not enough size runs in-store of the popular items. (Impossible to predict, I know.)
– Sizes are so inconsistent even within brands now that people have to order at least 2 sizes (and for shoes I have to order 3 sizes sometimes) which leads to upticks in returns.
– There are not enough outfit ideas and coordinating items being displayed together in-store.
– There is way, way WAY too much empty space in the stores. Every time I walk in I wonder if they’re doing a stock turnover.

Also, I want to say this again because this is a big one.

There. Are. Way. Too. Many. Online. Exclusive. Items.

It’s a problem when 3/4 of my wishlist — sorry, registry — is online-only items. Why bother going to the store at that point? Not only that, because I feel burned by how often items don’t fit right on top of the non-refundable shipping, a lot of items I just pass on right now altogether.

Perspective solution: carry one of each size of online-only items in your 50 highest-traffic stores, to allow customers to try them on for size and then if they buy it have the item drop-shipped. Like a trunk show of sorts. Count it towards store sales.

Community, I’m interested to hear your thoughts on this.

I think that between online-only fixes and showing more outfit ideas in-store (especially 2-3 with the same item) they’ll recover foot traffic more than a beauty stand, athleisure (gag) or pizza ever could.

I do want to wrap up by saying I’m ever more delighted by what Anthropologie is designing right now. Yes, there are still a lot of misses but starting in Summer 2015 I added about 7 new Anthropologie pieces I totally adore to my closet, which is a high number for me. My friends who have avoided Anthro all mentioned that they liked at least 2-3 things from the Fall/Holiday collection. There is still work to do but I’m very excited by the direction the designs are taking.

I want Anthro to do well. So, let’s give them some feedback! Community, your thoughts?

Further reading:
Urban Outfitters Reports Holiday Sales — NASDAQ

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