Urban Outfitters revamps its management lineup

Urban Outfitters Inc. has restructured its management and added a chief executive to oversee its Anthropologie brand, where fashion misses have hurt sales and become a source of increasing concern to investors.

The reorganization, announced Monday, coincided with the release of disappointing sales figures for the three months that ended Oct. 31. And it preceded a quarterly earnings disclosure planned for next week.

Chief executive Glen T. Senk said in filings with regulators that the company had hired David W. McCreight to fill the new post of CEO for Anthropologie Group.

McCreight, 48, former president of Under Armour and, before that, Lands' End, will run Anthropologie North America, Anthropologie Europe, and BHLDN (pronounced beholden), the mostly online bridal brand that launched earlier this year.

"David is a powerful leader with an intimate knowledge of the women's apparel industry and a proven track record of multi-channel, multi-category brands," said Senk, who presides over all divisions: Anthropologie, Urban Outfitters, Free People, and Terrain stores, and the company's burgeoning online retail business. Headquarters are at the Philadelphia Navy Yard.

Senk also eliminated Anthropologie's co-presidents but kept Wendy Wurtzburger as chief merchandising and design officer.

Senk also brought back Anthropologie veteran Kristin Norris, who had been previously assigned to help launch the bridal division. An Anthropologie chief operating officer was also named, Denise Albright.

The new chain of command is intended to shore up the division that drives a substantial portion of the publicly traded corporation's annual $2.3 billion business.

Anthropologie's comparable retail sales declined 7 percent during the last quarter and have lagged all year compared with Urban Outfitters and Free People.

Several analysts have said the brand had failed to produce apparel alluring enough to command the higher prices it charges; Anthropologie's target customers are women in households with six-figure incomes.

"Anthropologie has been challenged with fashion issues," said Margaret Whitfield, analyst with Sterne, Agee & Leach Inc. "We think the management announcement is positive. We are hopeful this will lead to improving merchandise assortments going forward."

In a research brief Tuesday by Raymond James & Associates Inc., analysts Samantha Panella and Elizabeth J. Howell urged investor patience.

"The company has indicated that it is in the midst of navigating a fashion shift, which appears to be negatively impacting sales and gross margins at its two primary divisions, Urban Outfitters and Anthropologie," they wrote. "While we believe Urban Outfitters has the ability to turn around its business, this may take longer than we are currently anticipating."

The company's shares closed down 3.2 percent by day's end Tuesday, at $26.34.

Slow sales at Anthropologie have vexed Senk for months and mark a period of difficulty after several years of mostly uninterrupted sales growth and profitability.

In May, coming out of a second consecutive quarter of declining sales that cut into profits, Senk told investors he was taking control of Anthropologie to review its fashions and refocus its operations.

Soon after, the company lost the president of its Urban Outfitters division, Steve Murray. Then, Senk eliminated Leifsdottir, a wholesale apparel business, and returned its creative director, Johanna Uurasjarvi, to Anthropologie as executive creative director of product design.

Whitfield said Anthropologie seemed to have been striking out with looks that are the opposite of big tops over skinny pants: "Think of [the show] Mad Men," she said, "with the high waist, belt, skirts. . . . Women are not gravitating to this new look."

With this week's changes, she said: "The three key players that were involved in the successful period of Anthropologie are now back, working together: Wendy, Kristin, and Johanna."

Senk has also hired Charles Kessler as chief merchandising officer of the Urban Outfitters chain's North American operations. And Wendy McDevitt was named president of Terrain, a home-gardening center with one location so far, in Glen Mills.