Supply chain speed supports sales growth at Urban Outfitters

Will Green is news editor of Supply Management
3 September 2018

More efficient supply chains have allowed Urban Outfitters to increase sales by 14% but raise inventory by just 3%.

During a conference call covering the retailer’s results for the second quarter of 2018, Barbara Rozsas, chief sourcing officer at Urban Outfitters, said over the past three years lead times had been cut by a month.

“Essentially we have aligned with our cross-functional partners,” she said. “We have better decision-making.

“We have platformed fabrics and we have had pre-development, which has definitely allowed us to reduce our lead times.”

The company reported sales of $992.5m in the second quarter of 2018, up 14% on $872.9m in the same period last year. Profits before tax were $118.6m, up from $76.9m.

Inventory increased 3% to $376m, leading to questions around whether this was enough to sustain revenue growth of 14%.

CEO Richard Hayne said: “I think we have plenty of merchandise right now to drive our sales.

“In some of the styles, like always, we might have one or two or three weeks of supply and we wish we have more, but that’s just the way this business is.

“I think overall we have sufficient inventory and I do believe that the speed – the customer initiatives that the brand leaders and Barbara have been working on over the last three years, have paid off nicely, not only in figuring out what’s the right product mix and items are, but being able to replenish them more quickly.”

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