Urban Outfitters, Aeropostale, Gain From ‘Frugal Fatigue’
A wide variety of specialty apparel retailers have seen improvements in same-store
sales (share prices too) as consumers have seemingly grown tired of not spending.
Even high unemployment levels and underemployment have not stopped consumers
from spending at higher levels than many expected so far this year.
Cohen, an analyst with The NPD Group, told BusinessWeek that
consumers are shopping now, in part, because they are experiencing "frugal
According to Mr. Cohen, "[Consumers] are starting to get tired of having
to only shop at the lowest-priced retail outlets, particularly in apparel, which
arguably had the worst performance during the recession."
Consumers are still looking for deals, he said, but the perception of value
has moved beyond price as the sole focus to take quality and durability more
Among the retailers that have come out of the economic downturn in strong
shape are Aeropostale and Urban Outfitters.
NPD’s Cohen is a fan of Aeropostale.
He told BusinessWeek the chain
delivers the right blend of price, value and style for its younger consumer
base. Beyond that, the chain is viewed more favorably by parents, who see it
as more family-friendly than some competitors who have blaring music and couches
positioned in dark corners within the store.
"If Mom comes in and sees
that, she says, ‘I’m not letting my kid come in here,’" said Mr. Cohen.
Aeropostale’s co-CEO Cindy Meads recently told CNBC, "We are
promotional every day, and we continue to improve upon our product. We sit
on the intersection between fashion and value, and it truly is a powerful place."
Urban Outfitters, according to Deutsche Bank, is "one of the premier
growth stories in all of retail." The retailer has benefited with growth
in its online business and expansion into foreign markets that promise higher
margins on sales. The chain is also expanding into new categories, such as
bridal, as it seeks to build on its current momentum.
Barbara Rozsas, chief sourcing officer for Urban Outfitters, recently told The
Temple News the company’s success is due to "smart merchants,
a strong design team, effective internal and external supply chains and great
Discussion Questions: What are successful chains such as
Aeropostale and Urban Outfitters doing that others are not? Would other chains
do well to position themselves "on the intersection between
fashion and value"?
- ‘Frugal Fatigue’ Spurs Specialty Apparel Retailers – BusinessWeek
woman behind Urban – The Temple News
Value Differentiate Aeropostale in Teen Space: Exec – CNBC