Urban Outfitters Inc plans to double its topline sales in the next five years by expanding its product offer and distribution, and improving customer engagement.
It plans to double sales and remain highly profitable. For the year to January 31, 2014 group revenue jumped 10% to $3.1bn (£1.9bn) and it achieved record net income of $282m (£173.7m).
As the first part of the five-year strategy Urban Outfitters Inc revealed it aims to drive sales by growing its product offer and distributing it more widely through its network of stores, direct-to-consumer and wholesale divisions.
The group wants to expand existing categories while launching new categories across the brands. It aims to grow Anthropologie’s home offer, but wants to launch a beauty range. In addition it will expand Urban Outfi-tters’ beauty and footwear ranges and Free People’s party dresses and lingerie offers.
To enable this Urban Outfitters Inc said it wants to grow its store footprint in North America by double-digits, increasing store size rather than increasing the number of shops it operates.
It added that it wants to open up to 50 Anthropologie stores which will be triple the size of the current 7,100 sq ft stores, according to Bloomberg.
The group said it wants to “elevate” the store experience, produce “captivating imagery” and strengthen customer engagement.
It said it will grow online sales by selling more products and categories online, expanding online overseas and enhancing the ecommerce shopping experience.
But the plans sparked a mixed reaction from analysts who believe that although the strategy seems simple, it may be hard to carry out.
FBR & Co analyst Susan Anderson said the group’s initiatives include same-day delivery, to be piloted next year, click-and-collect and global stock supply.
But she said doubling sales may be a challenge.
Anderson said: “It likely requires a 12% CAGR from our 2014 revenue estimate, which could imply aggressive comparative assumptions, though international and wholesale growth will help. In addition, expansion into additional product categories, such as home, may decrease the long-term steady state operating margins.”