Urban Outfitters 2009 Annual Report Download - page 10

In fiscal 2008 we executed a long-term lease to utilize 175,500 square foot distribution center in
Reno, Nevada, effectively relocating, expanding and bringing our west coast distribution service
in-house. In March 2009 we executed an amendment to our long-term lease for an additional 39,000
square feet at this distribution center. This facility services our stores in the western United States at a
favorable freight cost per unit, and provides faster turnaround from selected vendors. In addition, we
have a distribution center in Essex, England, which is operated by a third party, to service our current
and near-term needs for stores and direct-to-consumer operations in Europe.
Information Systems. Very early in our growth, we recognized the need for high-quality
information in order to manage merchandise planning/buying, inventory management and control
functions. We invested in a retail software package that met our processing and reporting
requirements. We utilize point-of-sale register systems connected by a digital subscriber line (DSL)
network to our home offices. These systems provide for register efficiencies, timely customer checkout
and instant back office access to register information, as well as for daily updates of sales, inventory
data and price changes. Our direct-to-consumer operations, which include the Anthropologie, Free
People and Urban Outfitters catalogs and retail web sites, maintain separate software systems that
manage the merchandise and customer information for our in-house customer contact center and
fulfillment functions. We launched a new, more functional web platform during fiscal 2008 that has
expanded capacity for additional traffic and sales through the web. The Free People wholesale segment
uses a separate software system for customer service, order entry and allocations, production planning
and inventory management. During fiscal 2007, we successfully completed installation of a new
wholesale customer service system that provides significantly improved functionality and flexibility to
help serve our customers. This system has the capability to handle additional workload related to
increased order volume and will better suit us over the long term to meet the wholesale segment’s
growth needs. We have contracted with a nationally recognized company to provide disaster-recovery
services with respect to our key systems.
During fiscal 2007, we also completed the upgrade of our existing point of sale platform at our
North American locations. This upgrade included the replacement of our existing register software,
replacement of registers and related hardware and the addition of radio frequency equipment to be
utilized in the store receiving and operations areas. We believe this upgrade has allowed us to process
customer transactions more quickly and efficiently, while reducing existing administration. We believe
this initiative has also resulted in advanced flexibility and customer service in the areas of locating
inventory and accessing the direct-to-consumer channel within our retail stores. This new platform
establishes better long-term technology resources and provides the infrastructure that enabled
Anthropologie to implement a customer relationship management system during fiscal 2008.
During fiscal 2009, we successfully completed a warehousing software system implementation
for our wholesale segment at our Trenton, South Carolina fulfillment center. The new software
provides significantly improved scalability and functionality aligning with our business growth needs.
We believe this upgrade will support our growth needs for the long-term. During fiscal 2009, we also
began phase one of a supply chain software implementation project.
Competition
The specialty retail, direct-to-consumer and the wholesale apparel businesses are each highly
competitive. Our retail stores compete on the basis of, among other things, the location of our stores,
the breadth, quality, style, and availability of merchandise, the level of customer service offered and
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