Urban Outfitters 2011 Annual Report Download - page 10

advertising such as print, radio and television media. Marketing activities for each of our retail store
concepts include special event promotions and a variety of public relations activities designed to create
community awareness of our stores and products. We also are increasingly active in the burgeoning
arena of social media and blogs. We believe that the traditional method of a one-way communication
to customers is no longer enough. We believe that by starting a conversation and interacting directly
with our customers, most notably via Facebook and Twitter, we are more effective at understanding
and serving their fashion needs. We also believe that our blogs continue this conversation. Not only do
we communicate what inspires us; it allows our customers to tell us what inspires them. This fosters
our relationships with our customers and encourages them to continue shopping with us.
Suppliers
To serve our target customers and to recognize changes in fashion trends and seasonality, we
purchase merchandise from numerous foreign and domestic vendors. To the extent that our vendors
are located overseas or rely on overseas sources for a large portion of their merchandise, any event
causing a disruption of imports, such as the imposition of import restrictions, financial or political
instability in any of the countries in which goods we purchase are manufactured, or trade restrictions in
the form of tariffs or quotas, or both, could adversely affect our business. During fiscal 2011, we did
business with approximately 3,300 vendors. No single vendor accounted for more than 10.0% of
merchandise purchased during that time. While certain of our vendors have limited financial resources
and production capabilities, we do not believe that the loss of any one vendor would have a material
effect on our business.
Company Operations
Distribution. A significant portion of merchandise purchased by our retail businesses is shipped
directly to our distribution center in Lancaster County, Pennsylvania, which we own. In fiscal 2010 we
completed construction on an additional 100,000 square feet of distribution space at this facility,
bringing it to 291,000 square feet in size. This facility has an advanced computerized materials
handling system and is approximately 65 miles from our home offices in Philadelphia.
We lease a 459,000 square foot fulfillment center located in Trenton, South Carolina. Currently,
this facility houses the majority of merchandise distributed by our wholesale and direct-to-consumer
channels. This building significantly expanded our fulfillment capacity and provides us with future
opportunities for additional growth as it becomes necessary. This facility also utilizes a state-of-the-art
and fully functional tilt tray sorter. The property currently accommodates all direct-to-consumer
fulfillment related functions, including inventory warehousing, receiving, customer contact operations
and customer shipping.
In fiscal 2008 we executed a long-term lease to utilize a 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 bringing it to 214,500 square feet in size. This facility services our stores in the
western United States at a favorable freight cost per unit, and provides faster turnaround from selected
vendors.
We plan to purchase land to construct a 468,000 square foot fulfillment center in Reno,
Nevada. This center will significantly increase our fulfillment capacity and provide us with opportunities
for additional growth.
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