Urban Outfitters' chief aims to right the ship

Think you have it tough picking out an outfit every day for work?

The hundreds of people at the Philadelphia Navy Yard in charge of selecting and buying fashions for one of the country's biggest specialty retail corporations are having a rough go of it, too, these days.

Trouble picking fashions that women actually want to buy is causing difficulty at Urban Outfitters Inc., whose report to shareholders this week revealed continuing problems with women's apparel not selling as well as expected at its Urban Outfitters and Anthropologie stores. (Sales at its Free People stores, conversely, were strong.)

The multibillion-dollar corporation was profitable during the quarter that ended April 30, posting net earnings of $39 million, but by a lower percentage than a year earlier, officials said Monday.

Anthropologie was hardest hit, with comparable store sales (a key indicator) down 6 percent, followed by Urban, up 1 percent.

It was the second straight quarter in which the global retailer reported that troubled merchandise selections affected financial results, and chief executive Glen T. Senk said he was taking the blame, and a hands-on approach to help right the ship.

"I wasn't spending enough time on this," said Senk, who ran the Anthropologie brand before becoming CEO of the corporation several years ago. "I am more involved."

"I don't want to be the kind of CEO who's picking thread colors on jeans pockets, but the team needs me right now," he told analysts. "I love doing it. I think I'm good at it. I think I can help the company this way. And when I feel I can back off, I will. But right now that's how I'm spending my time."

In March, the company reported laggard holiday sales had cut into profits, in part due to merchandise misses at Urban Outfitters stores, where unsold inventory had to be discounted to move. That report sparked an investor sell-off that sent share values plummeting 17 percent.

In April, the global president of the Urban Outfitters brand, Steve Murray, who had joined the company with extensive experience oriented toward male consumers, resigned to take a post with another retailer after being on the job for only a year.

Senk said he anticipated the board would discuss the search for Murray's replacement when it met Tuesday, in executive session.

"I think it's clear to us that people who know the women's apparel business have an easier time running our brands," Senk said.

Just two weeks after Murray left, the company announced a change in another area: Its upscale designer line, Leifsdottir, would no longer be sold to high-end department stores; instead it would be sold only at Anthropologie.

That move included the additional benefit of returning Leifsdottir's creative director, Johanna Uurasjarvi, to Anthropologie as executive creative director of product design.

The decision to eliminate Leifsdottir as a wholesale business just two years after its debut, he said, was driven by financial considerations.

"We did well with it, but it didn't - we didn't think that it ultimately had the potential that we needed to see," Senk said.

Since its launch in February, another new brand - wedding-apparel and events line BHLDN (pronounced "beholden") - has shown promise, Senk added, selling 170 wedding dresses its first day in business. It is online-only to date.

To strengthen its women's clothing business, the company recently added Judy Collinson as executive director of women's apparel at Anthropologie, and said Monday that Terence Bogan would start this June as general merchandise manager of women's apparel for the Urban brand. Both are formerly of Barneys New York.

As to what fashions exactly are sinking or flying - skinny jeans? loose shirts? - Senk has typically chosen not to answer such questions.

He instead told analysts that his buying team had not been brave enough in how they were ordering merchandise and had not closely monitored what was hot among competitors and on blogs.

In a note to investors, analyst Margaret Whitfield of Sterne, Agee & Leach Inc. said Senk's assessment suggested "a lack of clarity on behalf of the 600 merchant and design employees."

Analyst Jennifer Black of Jennifer Black & Associates said she had not been impressed with the offerings at Anthropologie, in particular, whose target customer is an upscale woman 45 and younger seeking an eclectic look.

"We have not been a fan of the tops at Anthropologie (we find the tops are very boxy) and believe it is hurting the bottoms business," Black wrote in a note Monday. "Women do not want to try on bottoms if they do not like the tops, in our opinion."