Stefan Laban on the expansion plans of Urban Outfitters in Europe, the Middle East, Asia
today Feb 27, 2018
US fashion and lifestyle retailer Urban Outfitters has opened its first French store in Paris, and Stefan Laban, Global Head of parent company URBN International, owner among others of Urban Outfitters, Anthropologie and Free People, talked to FashionNetwork.com about the group's expansion plans in Europe, the Middle East and Asia in the next three years. Laban joined URBN International in 2016, and is piloting its international expansion from London. He formerly worked for seven years at the Gap Inc. group, first in charge of international operations, then of strategic partnerships.
FashionNetwork.com: You recently opened the first Urban Outfitters flagship in Paris. What are your plans for the French market?
Stefan Laban: Clearly, we are not going to France to open just one store. We really wish to open several of them in Paris. In London alone, we already operate 10 stores, and this gives you an idea of the potential. Paris is top of our list [in France] and, if things will go well, we are going to consider other major cities in the country. But we’ll take our time. We have been looking for a retail location in Paris for several years. We needed the perfect premises, in a building full of character, on a shopping street where our store would be visible to consumers, and not inside a shopping mall. We are optimistic about this store's prospects: the way rue de Rivoli is evolving is very interesting for us, notably with the planned re-opening of the La Samaritaine complex in 2019.
FNW: Is your Paris showcase different from your other stores around the world?
SL: Each of our 200 stores worldwide is different, in terms of interior decoration, ambience and also the range on offer. Our own label makes up 70% of the range, and besides it there is a selection of brands, which produce exclusive capsule collections for some [of our shops]. For the Paris store inauguration, we presented a special collection by Champion. I think it's very difficult to last for long in the retail world if you don't have a truly unique, inspirational concept. You are either a true budget brand, like Primark, or you are Gucci, but in between these two, it's tough going. The way we approach it, is to keep changing our range all the time, with a lot of new brands and new products. Creativity is our DNA.
FNW: Urban Outfitters has ambitious international plans; is this a way to counter the difficulties the retail industry is facing in the USA?
SL: Our two growth vectors are e-commerce and international expansion. Our customers are always connected, and they shuttle back and forth between the web and the stores: 45% of our sales in the USA are generated online, and this share is increasing rapidly, while in-store business remains stable. Urban Outfitters is not interested in operating 300 to 400 stores on the American continent. Growth must come from elsewhere.
FNW: Urban Outfitters currently operates 50 stores outside the USA, all of them in Europe. Are you considering expansion into other continents?
SL: Of course! We have Asia in our sights. In the last few months, I travelled extensively across China and Japan. There are huge opportunities there, because a lot of young people already know the Urban Outfitters brand and are fond of this type of product. We are considering whether to set up a joint-venture company in China, or to operate in the country directly. In order to test the market, Urban Outfitters has been available on the Tmall website since the end of 2016. We are hoping to open a physical store in China and in Japan within three years. But before Asia, we will begin to venture outside Europe starting with the Middle East.
FNW: Are you ready to announce a store opening in the region?
SL: Yes, Urban Outfitters is about to enter Israel, opening a first store in Tel Aviv at the end of March. It will be a franchised store, a first for Urban Outfitters. We are already planning to open four other shops in the country, and then we'll expand across the rest of the Middle East. We have identified a partner to deploy throughout the region, but we cannot yet talk about this.
FNW: Are you encountering difficulties in looking for partners?
SL: One of the challenges of our expansion, if we decide to go the franchising route, is that we are keen to launch all our three brands together: Urban Outfitters, Anthropologie and Free People. We therefore need to be able to create a development plan for all our retail brands. And at the same time, to negotiate with the brands we are distributing. It is very complicated.
FNW: How much room to manoeuvre do you have in Europe? Which new countries are you looking to enter?
SL: In six months, Urban Outfitters opened five new stores, including our first flagships in France, Italy (Milan) and Austria (Vienna). We think the brand can still grow in Italy, France and Spain. There aren't many other major markets to enter in Europe, so we are going to focus on opening more stores in these three countries. The Milan store which opened last December got off to a super start, and this encourages us to continue along this path.
FNW: Which competitors does Urban Outfitters currently have?
SL: There are hundreds of them, but none of them is exactly like us. Our retail concept is unique. Of course, Zara, H&M and Forever 21 compete with us in fashion, but we offer a whole set of other products to our customers. Did you know we are the leading vinyl-record seller in the USA? At the headquarters, each product category has a dedicated team: one team focuses on books, another on tech gadgets, another on cosmetics, etc. They are all genuine category experts.
FNW: What is your social media strategy?
SL: Social media is essential for our expansion outside the USA. I worked for Nike and Gap in the past, but the Urban Outfitters group has the best image bank I've ever seen. Instagram is truly crucial for us, and both Urban Outfitters and Anthropologie have their own dedicated apps. We don't do traditional advertising in the printed press or with posters. For our Paris opening, all our communication was exclusively on digital media.
FNW: What about the growth of Anthropologie?
SL: [Anthropologie is] a lifestyle retailer which targets women aged 25-40, offering a range of fashion and home decoration products. It currently operates 200 stores, nearly all of them in the USA, except for nine in the UK. We are planning to deploy Anthropologie internationally via future partnerships and, in Europe, by operating the stores ourselves. We will open the first Anthropologie shop in Germany next May. We are also looking for a location in Paris: we think that Anthropologie is perfectly suited to the French capital, but we need to have an ideal position, with premises that aren't too small. Customers who have become acquainted with Anthropologie after a trip to the USA must be able to find the same range [in Europe] that they found there. Otherwise, they will be disappointed.
We are also trying to establish our first Free People stores in Europe. It's a boho-style fashion label, a style which now works very well, and needs smaller premises to thrive, about 300 m2. We are very busy looking for locations!
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