FINANCE

Urban Outfitters’ Q4 sales up 5.7%

BY Marianne Wilson

The direct-to-consumer channel helped fuel Urban Outfitter in its fourth quarter.

Total company sales rose 5.7% to $1.09 billion in the quarter ended January 31, from $1.03 billion. Same-store sales in the retail segment increased 4%, driven by double-digit growth in the direct-to-consumer channel and stronger apparel sales in January.

By brand, same-store sales rose 8% at Free People. 5% at Anthropologie and 2% Urban Outfitters grew 2%.

For the year ended Jan. 31, total company net sales increased 2% to $3.6 billion. Same-store sales in the retail segment were flat. Wholesale segment net sales increased 9.5%.

Urban Outfitters opened 18 locations in its recently completed year, including eight Free People stores, five Urban Outfitters stores, four Anthropologie Group stores and one restaurant. It ended the year with 245 Urban Outfitters stores in the U.S., Canada, and Europe and websites; 226 Anthropologie Group stores in the U.S., Canada and Europe, catalogs and websites; 132 Free People stores in the U.S. and Canada, catalogs and websites and 10 restaurants.

Urban Outfitters is scheduled to release fourth-quarter earnings on March 6.

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HanesBrands to acquire Australian retailer

BY Marianne Wilson

HanesBrands is expanding its portfolio.

Hanes has entered into a definitive agreement to acquire Bras N Things, a retailer and online seller of intimate apparel in Australia, New Zealand and South Africa. The all-cash transaction is valued at approximately $400 million.

In addition to its online channel, the company operates 154 stores in Australia, 10 stores in New Zealand and seven stores in South Africa. In 2017, the company had net sales of approximately $144 million.

In a statement, Hanes CEO Gerald W. Evans Jr. said that Bras N Things offered a natural complement to Hanes’ successful Bonds underwear business in Australia and New Zealand.”

“Bras N Things has a great business model that appeals to millennial consumers featuring core products supplemented by seasonal product offerings,” Evans said. “This consumer-direct sales model has significant potential for expansion into other geographic markets.”

With the acquisition, Hanes’ combined Australian commercial businesses would hold the No. 1 market position in bras and the No. 1 market position in panties in Australia, as well as the No. 1 market position for underwear, socks and babywear.

The acquisition is expected to close in mid-February.

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Outlook for U.S. sales is robust

BY Deena M. Amato-McCoy

Stronger consumer confidence could make 2018 a strong year for retailers.

That’s according to the National Retail Federation, which forecast that overall retail sales will rise between 3.8% and 4.4% in 2018 over last year. Online and other non-store sales, which are included in the overall total, are expected to increase between 10% and 12%. (The NRF numbers exclude automobiles, gas stations and restaurants.)

Retail sales grew 3.9% in 2017 over 2016 to $3.53 trillion, according to the U.S. Census bureau’s preliminary estimate for the year. The number, which is subject to revision, exceeded NRF’s forecast for growth of between 3.2% and 3.8%.

“A robust holiday season for retail sales is just one of many barometers that points to a consumer that is clearly feeling positive about their financial health,” said NRF president and CEO Matthew Shay.

“Despite headlines to the contrary, the retail industry is strong, growing and meeting consumer demand with the products they want at the prices they expect and the shopping experience they want to have, online or in store,” he added. “With consumer confidence high, unemployment low and wages growing, there is every reason to believe that retail sales will be robust throughout the year.”

As the overall economy gains strength, consumer confidence will continue to swell. For example, the economy is expected to gain an average of 163,000 jobs a month, down slightly from 2017, but consistent with labor market growth. Unemployment is expected to drop to 3.9% by the end of the year, and gross domestic product growth is likely to be in the range of 2.5% to 3%, according to NRF.

“The underpinnings of the economy are very good and consumer spending is at the center of our outlook,” said NRF chief economist Jack Kleinhenz.

“The push and pull of forces both external and internal to the U.S. economy will continue to provide challenges, but on balance we expect a good year,” he added. “And as the retail industry continues to transform, retailers will leverage the new tax plan to invest in their employees, stores and new formats that engage with the ever-evolving and demanding consumer.”

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