Best in Class: Urban Outfitters Drives Sales Without Sales

Terrain currently only has one store in Philadelphia, but Kyees estimates the garden industry is about an $85 billion business. "While Terrain won't be an overnight growth story, it does have potential," Chen said. "Unfortunately, it hasn't been well-received by investors since they don't understand it. But investors didn't understand Anthropologie when it was first rolled out and the concept has been immensely successful for the company."

Leifsdottir, however, has been a winner since its launch last July, and has been selling out in department stores like Nordstrom(JWN). It has done so well, in fact, that Kyees said Leifsdottir has the potential to become a retail concept.

"These two concepts may or may not work," Kyees said. "But all of our growth is very deliberate. Unlike some companies, which wait until they have reached maximum growth before developing another concept, Urban Outfitters' management wants to give new concepts time to develop. Some of the concepts that closed recently could have succeeded if they had enough time to live and grow naturally."

Case in point: Last month, Abercrombie & Fitch announced it will shutter its Ruehl concept, while American Eagle's Martin + Osa has been speculated to be next on the chopping block according to analysts.

But Urban, according to Kyees, will rely on more than just Terrain and Leifsdottir down the road. He says he also expects the company to roll out another two to four concepts, with the added possibility of a small acquisition.

He also cites opening doors overseas, particularly in Asia, as another means of growth. And the direct-to-consumer segment, which currently comprises 15% of company sales is slated to soon drive 20% of total business.

Too ambitious? Time will tell. But not to this company, which is actually thinking bigger than single stores. Last year the company launched its first "lifestyle center," called Space15Twenty, in Los Angeles. A self-described "retail experiment," it boasts an outdoor musical performance space, a curated art gallery, film exhibits, one-off installations by new designers, and a rotating collection of complimentary vendors.

Sounds like the work of a true contrarian.

Which of the following retailers do you think will report the best earnings?
	Urban Outfitters Abercrombie & Fitch bebe American Eagle Outfitters

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