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Takeaway: What is Urban Outfitters doing? Building palaces?

Want a Haircut & Fries With Your Skinny Jeans? | $URBN - conan jeggingsext 640x360 120220101049 0

Urban Outfitters Moves Into Space Ninety 8

  • "With 37,000 square feet on four levels and a directive from chief executive officer Richard Hayne to come up with new ideas, the barriers in some ways were lifted."
  • "The non-traditional retail experience, as the company refers to the space, features a strong food component. The Gorbals Restaurant and Bar, operated by Ilan Hall, 'Top Chef' and host of Esquire TV’s 'Knife Fight,' will be in residence on the third floor. Hauser said food will also play a role in the 57,000-square-foot Urban Outfitters flagship opening in Herald Square in June, which will have a coffee shop, hair salon and eyeglass shop. Urban Outfitters’ Fifth Avenue flagship recently added a coffee bar."
    Want a Haircut & Fries With Your Skinny Jeans? | $URBN - 1

Takeaway From Hedgeye’s Brian McGough:

We’re not really sure we understand what’s going on with Urban Outfitters’ new prototypes. A coffee shop? That could work. But restaurants and hair salons? That’s a bit much—if not borderline alarming. How many tourists are looking for a fresh trim when shopping for skinny jeans in Herald Square? Urban Outfitters is looking at new categories as growth drivers. We get it. But it sounds like the brand is running out of things to put in these enormous boxes that are 4-5 times bigger than the typical footprint. We'd rather they keep the boxes a bit smaller, and put more focus on what's inside.

Editor's Note: This is a complimentary research excerpt from Hedgeye Retail Sector Head Brian McGough. Follow Brian on Twitter @HedgeyeRetail

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