Urban Outfitters is trying on the time-tested draw of retail shop-in-shops as it launches On Rotation with Nike.
The Philadelphia-based retailer said its new “culture-driven, in-store experience” will launch at five of its existing Urban Outfitters stores in a bid to revive the brand’s resonance among a younger, Gen Z consumer.
The shop-in-shops will feature a rotating cast of brands moving forward, but debuts with Nike apparel and footwear. Both brands will drum up excitement around On Rotation with a limited edition capsule collection in conjunction with the Nike After Dark Tour: Los Angeles 13.1 race June 7.
The assortment can also be found online at Urban Outfitters. The in-store installations are located inside Urban Outfitters stores in Manhattan Beach, San Diego and Scottsdale in the Western region. On the East Coast, it will be in New York and Washington D.C.
The retailer described On Rotation as “lounge-style installations.”
Urban Outfitters Head of Stores and Branch Management Brad Desy called On Rotation a “living discovery engine” and a “platform to bring our brands to life in real time.”
Reversing UO’s Revenue Decline
Cutting through the marketing, the retailer is dabbling with a concept a number of its peers have employed, ranging from independent surf shops and boutiques to national department stores. Brands obtain key selling floor space, while retailers may nab product exclusives or additional marketing hype.
For Urban Outfitters, specifically, the move is key as its parent looks to reverse a disappointing sales streak.
Urban Outfitters, the chain, generated net sales of $1.2 billion in the fiscal year ended Jan. 31. That’s down 7.8 percent from the prior year as the retailer struggled with its assortment.
Meanwhile, its sister brands in Anthropologie, Free People and Nuuly all notched considerable gains in the fiscal year. That was led by Anthropologie, Urban Outfitters Inc.’s largest business by revenue, with $2.4 billion in sales during the recently ended fiscal year. That’s a jump of 8.6 percent from the prior year as Anthropologie’s buyers have successfully expanded the assortment and shopper base.
Nike Looks to ‘Win Now’
Nike, meanwhile, is on its own aggressive path back to growth.
The Beaverton, Ore.-based sportswear giant is clearly looking for results to come quick, with a strategy it’s calling “Win Now.”
Revenue during Nike Inc.’s fiscal third quarter ended Feb. 28 sank 7 percent, excluding the impact of exchange rates, to $11.3 billion.
The company’s namesake and largest business was down 6 percent in constant currency to $10.9 billion. The decline was seen across the company’s geographic regions.
Both of the company’s channels, direct-to-consumer and wholesale, also stumbled in the quarter.
In February, Nike said it was teaming with Kim Kardashian’s Skims to launch a new women’s brand, called NikeSkims.
The two companies said at the time, the new brand would launch in the U.S. in the spring and then expand globally next year. NikeSkims was described as a fitness line that would include apparel, footwear and accessories.
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