Urban Outfitters 2010 Annual Report Download - page 6

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Urban Outfitters also operates a web site targeting our European customers. The web site,
www.urbanoutfitters.co.uk, captures the spirit of our European stores by offering a similar selection of
merchandise as found in the stores. Fulfillment is provided from a third-party distribution center
located in the United Kingdom. We believe the web site increases the reputation and recognition of the
brand with its European target customers as well as helps to support our Urban Outfitters’ European
store operations.
Free People offers a direct-to-consumer catalog offering select merchandise most of which is also
available in our Free People stores. We believe the catalog has been instrumental in helping to build
the Free People brand identity with our target customers. We believe our catalog expands our
distribution channels and increases brand awareness. During fiscal 2010, we circulated approximately
7.4 million catalogs and plan to expand circulation to approximately 8.2 million catalogs in fiscal
2011.
Free People operates a web site, www.freepeople.com, that accepts orders directly from
customers. The web site exposes consumers to the product assortment found at Free People retail
stores as well as all of the Free People wholesale offerings. As with the Free People catalog, we
believe that the web site increases Free People’s reputation and brand recognition with its target
customers and helps support the traffic of Free People’s store operations.
Terrain operates a web site that accepts orders directly from customers. The web site,
www.shopterrain.com, was launched in September 2009. The web site exposes consumers to a portion
of the product assortment found at the Terrain retail store. We believe that the web site increases
Terrain’s reputation and brand recognition with its target customers and helps support the traffic of the
Terrain’s store operations.
Increases in our catalog circulation are driven by our evaluation of the response rate to each
individual catalog. Based upon that evaluation, we adjust the frequency and circulation of our catalog
portfolio as needed. In addition, we evaluate the buying pattern of our direct-to-consumer customers to
determine which customers who respond to our catalog mailings. We also utilize the services of list
rental companies to identify potential customers that will receive future catalogs.
We plan on increasing our spending on investments in web marketing for Urban Outfitters,
Anthropologie, Free People and Terrain in fiscal 2011. These increases will be based on our daily
evaluation of the customers response rate to our marketing investments.
Direct-to-consumer sales for all brands combined were approximately 16.7% of consolidated net
sales for fiscal 2010.
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