Urban Outfitters' new CEO was already immersed in day-to-day operations

In a meeting with analysts Thursday, a key Urban Outfitters Inc. executive described the sudden departure of chief executive officer Glen T. Senk as "unfortunate" while offering assurances that the Philadelphia-based retailer was entering "a new era" with founder Richard A. Hayne back in charge.

"I'm not here today to deliver a message that the strategy is moving anywhere different than where it has been," chief financial officer Eric Artz said at the ICR XChange conference in Miami, where he was asked to discuss the leadership change that sent shares plunging after it was announced Tuesday. "Yes, we had an unfortunate situation this week."

Artz then praised Hayne, the company's 64-year-old board chairman and largest stockholder (with 21 percent holdings) for his "brilliance." Hayne, he said, was well-positioned to take over for Senk because he stayed involved in day-to-day operations even after Senk was named Urban's first CEO in 2007.

Hayne founded the company with a single store in University City in 1970 and presided as board chairman over its growth to 422 stores in North America and Europe. He takes over as Urban struggles to come out of a yearlong slump of declining profits at its Anthropologie and Urban Outfitters divisions, where poor merchandise offerings among women's tops and other apparel caused widespread discounting that cut into profits.

"We're focused on moving the business forward," Artz said during a 20-minute session in which he answered questions from analyst Stacy Pak of Barclays Capital.

Artz said he had had only two business conversations with Hayne earlier this week "as this unraveled." But in the two years that Artz has been CFO at Urban, Hayne routinely popped into his office to discuss matters of company strategy. Their offices are next to each other, he said.

"Dick is returning from retirement," Artz said, before adding: "Dick never retires from anything," and, "Dick has had a presence even during Glen's tenure as CEO."

Hayne has stayed abreast of the corporation's finances and was "definitely up to date on a quarterly basis in terms of what's happening with our business," Artz said.

From the company's Philadelphia Navy Yard headquarters, Hayne this week declined an Inquirer request for an interview. Senk did not return several messages.

Hayne replaced Senk as CEO on Monday, and it was made public through a news release at the end of the next trading day. Then Wednesday, David Yurman Inc. announced that it had hired Senk, 55, as a CEO with an equity stake in the privately held jeweler based in New York.

Artz did not discuss the circumstances surrounding Senk's departure.

Senk had worked alongside Hayne for 18 years and had helped launch the very Anthropologie chain that plagued the company in his final 12 months.

Starting about a year ago, quarter after quarter revealed that slow sales of women's merchandise at Anthropologie and Urban Outfitters were forcing costly clearance markdowns.

In recent months, Senk shook up his management ranks of Anthropologie, creating a CEO position for that one brand to report to him.

Senk also retired the company's still relatively new Leifsdottir wholesale designer apparel line, returning that division's creative director, Johanna Uurasjarvi, to Anthropologie as executive creative director of product design.

He also hired a new merchandise leader at the Urban Outfitters brand, among other moves. Hayne had a say in it all.

"All executive hires go through Dick's office," Artz said. "Some of the senior leaders you've seen us announce in the recent past have all interviewed with Dick."

Whether all of those moves will right the ship is unknowable until spring merchandise hits stores. Artz said prior stumbles had taken 12 to 15 months to sort out.

"We're moving from one season to the next, and I think we as an organization - and you from the outside world - will be watching to see how we transition," he said.

Shares closed Thursday at $24.55, up 2.59 percent for the day. On Wednesday, they fell 18.63 percent as Wall Street reacted to the CEO change.