By Tom Ryan
Urban Outfitters Inc. last week announced plans to buy J. Franklin Styer Nurseries Inc., a well-known operator of garden centers in the Philadelphia metropolitan area. The acquisition will drive the launch of the company's newest green concept, Terrain.
The goal of Terrain is "to transform the local garden center into an experience that celebrates the beauty and abundance of nature while offering an eclectic mix of garden-inspired products tailored for the contemporary customer," according to a company press release.
What makes the purchase interesting is not only Urban's launching of a new concept, but its decision to expand beyond retail into a service business. Besides selling mulch, silk orchids, garden books and tools in a comfortable atmosphere that includes a leather sofa and a coffee bar serving upscale La Colombe coffee, Terrain will offer landscape design and construction.
The Philadelphia Inquirer noted that this puts Urban in the same category as Pep Boys, which sells tires and also mounts them, and Home Depot, which sells countertops and also installs them in kitchens it helps design.
Instead of creating the concept internally like its Urban Outfitters and Anthropologie concepts, John Kinsella, Terrain's managing director told the Inquirer, "We're going to create strategic partnerships - by creating partnerships with selected higher-end garden centers, we're going to learn more about this industry, because it's a complicated business."
More bullishly, Mr. Kinsella told the newspaper that Terrain will fill a gap between the 20,000 mom-and-pop garden centers with less than $5 million in sales and Home Depot.
"There's a lot of opportunity. No one national is doing it on a local level," said Mr. Kinsella.
Said Richard Hayne, Urban's chairman and founder, in a statement, "We look forward to growing Styer's existing business and integrating it into our Terrain brand. We believe Terrain at Styer's will become one of the premier contemporary garden centers in the country."
Discussion Question: What do you think of the potential of a contemporary garden center chain such as Terrain? What most impresses you about the Urban Outfitters and Anthropologie concepts and how do you think those skills translate to operating a garden center? What are the risks of Urban moving into the services business?