Teenage Dream: How Urban Outfitters Is Navigating a Rocky Retail Scene

The Urban Outfitters concept shop in Williamsburg, Brooklyn, known as Space Ninety8, was bustling on a recent Saturday afternoon. It was an unseasonably warm day, and small groups of young women, having finished their brunches at nearby faux diners and French-bistro style restaurants, moved in packs among the clothes that hinted at spring: light floral dresses, faded high-waisted jeans, and cropped wide-leg pants. It smelled vaguely herbaceous inside, like a dorm room of someone who really liked patchouli, and it hummed with the energy of youthful possibility — the exact mood the brand tries bottle and sell to its young fans in the form of graphic tees and clogs.

“I didn’t even know this was an Urban,” said Alexis Ravello, a 16-year-old who drove in from Long Island with her mom, sister, and a friend to go shopping and hang out for the day. She could be forgiven: There was no overt signage indicating this was an Urban Outfitters store, and the design — knotty wood-plank floors, rusted industrial beams, verdant plants in glazed clay pots, macrame decor hanging from rafters — felt more like a funky boutique than part of a global corporate retail operation. Alexis seemed disappointed. There was, after all, an Urban Outfitters just a short drive from her home, but jewelry from local artisans and a robust offering of beauty products piqued her interest, not to mention some fun sportswear pieces from collaborations the company did with FILA and Champion. “There’s definitely some cute stuff here,” she said looking around for a dressing room to try on the pair of track pants and two T-shirts in her hand. “Everyone shops at Urban, which can be good and bad, I guess.”

It was a stark contrast from the American Apparel next door, which had clearance signs in the front windows, telling passersby that the product inside was up to 50% off (discounts would later increase to 70% off). Scoop-neck T-shirts and tie-dye hoodies hung forlornly on racks at the teen retailer, known for its hipster basics and scandalous advertisements. AA was acquired by the Canadian manufacturer Gildan earlier this year, as part of the brand’s very public fall from grace and subsequent bankruptcy. One can’t help but feel this spectacular crash is symbolic, somehow, of the challenges that the fashion industry faces.

It’s hard out there for teen retailers, which are trying but often failing to connect with young, digitally engaged consumers. Like American Apparel, the once-hyped Nasty Gal was recently acquired by British brand Boohoo after declaring bankruptcy late last year, and Wet Seal, which used to be a mall go-to for teenagers, also declared bankruptcy. Meanwhile, Abercrombie & Fitch is expected to close 60 stores this year and, if you haven’t already heard, malls — once considered a sinkhole for teens’ spending money — are dying. A recent headline from Business Insider ditched subtlety and screamed “The Retail Apocalypse Has Officially Descended on America.” Yeesh.

So far, Urban Outfitters is staying afloat despite the various challenges it faces. In its annual report, the company reported $3.5 billion in net sales, a 2.9% increase from last year, and warned that the first quarter has fallen short of analysts’ predictions. As far as sales go, that doesn’t sound great, but the fact is, the industry is in transition. “Retail certainly has to be measured with a different yardstick than we’re used to in the past,” says Marshal Cohen, the chief retail analyst at the market research firm NPD Group. Sales are, of course, important, but they aren’t the only thing, especially as travel and experiences edge out image as the priority purchase among young people. And image isn’t just about fashion today: It’s about your appearance on social media where, as it happens, Urban has a strong foothold.

It has done this in part by collaborating with a roster of third-party brands that lend instant street cred that its competitors lack, partnering with influencers with built-in digital cachet, and by doubling-down on building a community both through social media and with store events.

Additionally, despite being a huge corporate entity, Urban is dedicated to being nimble — absorbing cues from the street, the runways, and social media — and reflecting those trends back to customers, practically in real time. (Many projects work within a two- to three-month cycle, whereas bigger corporations can plan years out). And while other brands are beholden to the pre-internet era when their influence crested, Urban Outfitters happily skips from decade to decade, cherry-picking nostalgic touch points and repackaging them for the digital age.

The thing that separates Urban Outfitters from all those other teen brands is that its brand ID has changed every five years. It has evolved from boho to goth to clubwear to athleisure, without skipping a beat. Abercrombie and Fitch, Wet Seal, American Apparel did not, either making one painstaking evolution over a generation, or hardly changing at all. Perhaps, rather than a liability, Urban Outfitter’s brandlessness has been its greatest asset.

The Urban Outfitters headquarters is located in the former Navy Yards in Philadelphia, a series of majestic brick buildings with sprawling windows a stone’s throw from the Delaware River. It’s where the retailer’s parent company URBN has formed a campus consisting of over 280,000 square feet to accommodate not only Urban Outfitters, but its other flagship brands, Anthropologie and Free People.

It’s gray and cold the day that I visit, and it happens to be the day of Urban’s quarterly brainstorming meeting, where the creative team meets to discuss the upcoming months and how to best implement their various collaborations in a way that will resonate with customers across both the digital space and in real life. Everyone from the brand’s creative director to assistants gather together to spitball ideas, and the idea of corporate hierarchies is banished — everyone’s opinions are valid and, in fact, oftentimes the younger team members are eagerly looked to as oracles, seeing as they’re the age of the customer they seek to connect with. There’s a sense of excitement among the employees I speak with, divorced from any concerns of the instability going on in the industry.

I meet with Joanna Ewing, chief executive global creative director. She’s been with the company for 15 years, and started out in the fitting rooms at a store in New York, on Broadway and 72nd Street, which isn’t an unusual story: Many people have been with the company for a decade or longer and started out working on the retail level at their local store before moving to the corporate side. In fact, it’s that sort of homegrown energy the brand prides itself on.

“I love this customer very much,” Ewing says over coffee in a visitor’s area that has a shabby-chic feel appropriate to the brand. “I remember very much what it’s like to be that customer. I shopped at Urban Outfitters when I was a teenager, hoping desperately to leave my small town and go to a city.” It’s because of that feeling that much of the brand’s visual has a dreamy cast to it, like Ryan McGinley on a road trip, which is then beamed out to would-be buyers. “It’s encompassed in this visual content, be it delivered through a catalogue or through a shopping experience where you’re essentially choosing to express yourself and curate who you want to be.”

Ewing sees it as her job to act as a den mother for her team, so that they can feel emboldened to create a visual identity that represents the ethos of the brand, which focuses on people between 18-28. “Brand magic is cool, but there’s a lot of intense global conference calls that happen, too,” she says. “I love the creator’s myth, like, ‘I built this magical brand’ … and no one wants to say, ‘Oh, and it involved a lot of Skyping,’” she says with a laugh. “It’s not very sexy.”

I first noticed the “brand magic,” as Ewing calls it, a year or so ago, when Urban lined up a string of collaborations which felt cannily in tune with the times. Collaborations are nothing new — in fact they’re now industry standard from high-end labels (Supreme for Louis Vuitton) to mass retailers (Alexander Wang for H&M). But the brands they were working with felt undeniably relevant. In recent months, for example, Urban has worked with Adidas, Calvin Klein, Tommy Hilfiger, FILA, Champion, Dickies, Nautica, and Juicy Couture, to name just a few, brands that are benefitting from a surge due to either ‘90s nostalgia, collaborations with other high-end labels like Vetements or Gosha Rubchinskiy, or a mix of both.

“The thing that I always say, and I’ve said it for years, is it’s about the unexpected/familiar,” says Colby Black, a general merchandising manager who focuses on men’s apparel, and started his career at the company 13 years ago at a Manhattan store. “You want something that’s familiar to you, but unexpected. When it’s not familiar and not expected, that’s when it can be a bit of a challenge. When you think of it that way, the resources are endless.”

In the past two years, Black and his team have ramped up their portfolio of third-party brand partners, from two or three bigger partnerships to now divvying it up between 10 or 15. Millennial and Gen Z shoppers have been trained — thanks to the endless scroll of Instagram images or Twitter updates — to expect constant refreshes. “We wanted to create more newness in the stores and consistent updates in the store,” Black says. Not only that, Urban Outfitters looks for influential celebrities to help promote the product in campaigns and help bring the release to life. Notable examples of this synergistic ideal include the rapper Lil Yachty starring in the Nautica campaign and hosting an event at the Williamsburg store; and R&B singer Tinashe as the face of the Juicy Couture collection, culminating in a performance at a Los Angeles store.

If there was a turning of the page at Urban, perhaps it can be traced back to this: Ewing came back from a stint as Creative Director at Nasty Gal in late 2013 and Black was given the DMM job in 2014 after spending time Urban’s in-house activewear line Without Walls. That both have history with the brand and left only to return, re-energized, says something about this new influx of creative oomph. (People who leave and come back are called “boomerangs” in UO parlance.)

While this energy is exciting, Black admits it can be exhausting, too. “UO customers are highly engaged in the moment, but that moment is fleeting. They like what they like today but they may not like it a week from now. They’re smarter than they’ve ever been. We don’t have to teach the customer, which we used to have to do. They know what celebrities are wearing, they know what’s going on in music and art.” All of which makes it that much more challenging to surprise shoppers.

While the company, obviously, monitors successes in concrete terms like financial returns and trackable social engagement, Black finds comfort in the overlap with what his team is doing and its reflection in the fashion scene at large. “Don’t get me wrong, I don’t think that high end designers are looking at Urban, per se, but it is funny because we’re like, we’ve been doing FILA collaborations before Gosha, we’ve been doing Reebok and Champion collaborations before Vetements,” Black says. “It’s kind of funny to see collaborations that we’ve done end of up on designer runways like a year later.”

All this is telling, but it isn’t to say that everything is perfect. In early March, Urban reported quarterly earnings which fell short of analysts’ expectations, Bloomberg reported, with URBN CEO Richard Hayne blaming too many stores. “This created a bubble, and like housing, that bubble has now burst,” he said. The brand’s stocks were taken off the S&P 500 and the music festival Coachella slapped the parent company with a lawsuit for using its name to sell Anthropologie products. Just last week, some alarming headlines made the rounds online. So what, exactly, is going on?

“We used to look at retail and say, they have to get growth, that’s the indication of being in a healthy position. That’s not the case anymore,” says Cohen of the NPD group. “You have to dissect it a little bit deeper.” Cohen says that retail, as he sees it, is broken, and that includes the way we look it’s success.

If we move out of the short-term numbers and at the bigger picture, Cohen thinks Urban is in an ideal place, and is positioning itself for an even better future — even if immediate sales data looks precarious. “Is someone like an Urban, who markets to that younger consumer, successful? The answer to that is yes. What they’re doing is that they’re outperforming in that category of retail, that speciality and young adult consumer mindset,” he says. Part of this is exactly because of those third-party partnerships. Cohen thinks the retail scene is moving back to the boutique atmosphere that dominated 20, 30 years ago and the variety at your local Urban — specially curated to reflect the neighborhood — will resonate with young shoppers there. In fact, WWD reported that data firm Cambridge Analytica found the brand to be a favorite with millennials.

Regardless of the setbacks and the successes, retailers don’t have much choice other than to look forward, which Urban Outfitters is doing steadfastly. “I feel like we’re relevant,” Ewing says, resolutely. “There are huge opportunities...we see ourselves going towards a retail-tainment” — a mix of retail and entertainment. Think shoppable music videos that live on YouTube or sketch comedy performed by social media personalities where you can click-to-buy what they’re wearing. “I don’t think that blueprint has been made yet. Between agencies, brands, talent, and merchandise, this is the new gray area and there is no blueprint and we’re excited to be the people to go out there and make it.”

That means delivering a message with commercial appeal without ignoring the social and political atmosphere in which we live, and Ewing and her team are excited to use the brand as a platform for that, mostly because that’s what their customer wants and expects. “We’re listening to what’s going on,” she says. “The Adidas campaign is interesting, because we wanted to do something with meaning and get people in a room and offer our brand as a platform. I’m very sensitive to coopting and commercializing certain ideas and we debate endlessly about the delicacy of those gestures,” she says. However she notes that the campaigns are often a reflection of the people creating them. To that end, the brand’s been activating its in-house philanthropic arm, UO Cares, to pinpoint relevant non-profits to work with on many of these product releases. “I think the most inspiring thing is that lately, and I know we all see this, the fact that young people are really willing to put their values out there and come together,” Ewing says.

As the recent Pepsi commercial debacle demonstrates, young people today want to feel connected to causes greater than themselves and yet are incredibly sensitive to having their beliefs commoditized. Urban welcomes young people on its teams — at one point I met with a trio from the social media team who were unnervingly poised and barely out of college — and listens to them, encouraging brutal honesty. Can a brand sell cute tops and believe that they stand for progressive ideologies? It’s a difficult balance (not least of which is because URBN CEO Richard Hayne is known to have conservative-leaning political views), but as sites like Teen Vogue, Cosmopolitan and this one demonstrate, consumers today want to look stylish and believe in political activism — the two aren’t mutually exclusive.

Both Ewing and Black are transparent about the funny fact that today’s Urban Outfitters looks eerily similar to the one they shopped in the late ‘90s, and they’re unafraid to play with the duality. Part of their customer may be a Gen-Xer looking, bemused or aghast, at the fact that their childhood is now trendy again (meaning — gulp! — you’re old enough to have seen a 20-year trend cycle take place), whereas a new generation comes to the ‘90s revival with fresh eyes, unfettered by a fraught sartorial history. “This is exactly the Urban I shopped 20 years ago,” Ewing says laughing. “It’s amazing that people are excited about coming together and making ‘zines and coming together to support each other. There’s definitely a nostalgic quality.”

As life becomes increasingly digitized, Urban Outfitters hopes its future is in straddling the divide between online connections and real life ones, by making contact with people via social media and then luring them into stores. “I don’t believe that brick-and-mortar is going to go away, I think it’s going to be cooler than ever,” Ewing says. Indeed, physical stores are still important to the brand, even though a majority of sales now happen online. But hopefully creating exciting real life moments, like the Tinashe concert — and then broadcasting them on social, naturally — will help create a halo effect that projects a general feeling of cool around the brand.

“That’s what we’re dead-set on creating, these experiences, because our customer is in the most exciting time of their lives. Who doesn’t remember more than anything from when you were 18 to 24? What a pleasure to serve people in that time, when they’re happy and confident and on the verge and experimenting and finding themselves,” Ewing adds. And whichever version of “themselves” teens want to experiment as — the hipster clad in Champion, the boho in flowing lace, the retro-seeker in Calvin Klein and Nautica logos — Urban will have something that fits, hanging on the racks or projecting outward from from its Instagram, no judgement included.