“ Urban Outfitters heads to the mall” By, Lindsay Snyder & Nichole Wesolowski

Urban Background Innovative specialty retailer and wholesaler Started in 1970 as The Free People’s Store in West Philadelphia Owns Free People & BDG brands Target Market: year olds Women, men, accessories, apartment, novelties

Current Locations: More than 85 stores in the U.S., Canada, Scotland, Ireland, & England Oregon Locations: NW 23 rd,Downtown Portland & Bridgeport Village

Expansion: In 2002, the chain projected to double its number of locations within the next few years Locations in 2002: 49, Locations in 2005: 85 In 2002, sales totaled $349 million, estimated to reach 490 million in 2 years By 2004, sales were at $548 million 2005 sales at $828 million

Forecasted Earnings Growth:

Urban at King of Prussia Mall, PN Two level store covering 12,000 square ft. First of what could be a strong push into the suburbs The mall stores are no different, “would be just as edgy as the stores you would find in SoHo, downtown New York.“ As of January 31 st, 2005, sales have increased 50% at this location

Mall Description: 400 stores in the mall Sears, Nieman Marcus, Old Navy, Versace, Tiffany, Nordstrom 3 rd largest mall in the country

Article: President of Urban Outfitters’ retail division, Ted Marlow says the company is “looking at a mix of enclosed malls, lifestyle shopping centers, and downtown areas.” By moving to malls, Urban will be able to target a greater range of shoppers. In 2002, the company was expected to spend $25 million to open 4-6 flagship stores, which they did by 2005.

"DIMINISHING UNIQUENESS"? A key factor in its growth is the move into malls. So far, Urban Outfitters has opened stand-alone stores mainly in busy cities or college towns away from suburban malls. But much of the new growth for both concepts will be mall-based or in so-called lifestyle centers. "Malls lend themselves to a more formulaic approach," says Dave Turner, analyst at BB&T Capital Markets, noting that the expansion process can be much more efficient, and setup costs are typically lower. Since top malls are owned by a handful of operators, "they can go to the 10 largest mall owners and work it out from there." The move into typically suburban malls runs the risk of "diminishing uniqueness," says Turner. Being able to draw traffic without cookie- cutter brands is one of its strengths and something it will want to be careful to preserve as it expands. "There's a concern that we could become too common.”

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