Urban Outfitters 2011 Annual Report Download - page 11

Our European stores and direct-to-consumer channel currently utilizes a third party distribution
center in Essex, England. In June 2010 we leased and began construction on a 98,000 square foot
distribution center and a 142,000 square foot fulfillment center in Rushden, England. We anticipate
transitioning all of our European distribution and fulfillment operations to these facilities during the
second quarter of fiscal 2012. Our distribution facility will support our entire European store base and
will have a state-of-the-art materials handling system. Our fulfillment facility, which will support our
entire European direct-to-consumer channel, will have an advanced cross belt sorter. We believe both
of these facilities will support our European growth for the next several years as well as add
operational efficiencies when fully operational.
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 the Anthropologie, Free People, Urban Outfitters, Leifsdottir,
Terrain and BHLDN retail web sites, maintain separate software systems that manage the merchandise
and customer information for our in-house customer contact center and fulfillment functions. The Free
People and Leifsdottir divisions within our wholesale segment use 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 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 2009, we successfully completed a warehousing software system implementation
for our wholesale segment at our Trenton, South Carolina fulfillment center. During fiscal 2010 we
began implementation of the warehouse software at our Lancaster County, Pennsylvania and Reno,
Nevada distribution centers. This implementation will be complete in fiscal 2012. 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 2010, we began work on an Order Management System (“OMS”) that will
significantly improve our ability to serve both our store and online customers and will provide for
substantial improvements in our back office administration as it relates to supply chain, fulfillment and
inventory control. Furthermore, it will integrate inventory visibility regardless of the channel in which
the merchandise was received or sold. We completed the implementation of the OMS for three of our
six brands in fiscal 2011 and expect to convert the remaining three brands in fiscal 2012.
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