Urban Outfitters 2012 Annual Report Download - page 10

Table of Contents
Marketing and Promotion
We believe we have highly effective marketing tools in our websites and catalogs. We refresh this media as frequently as daily to reflect the most
cutting edge changes in fashion and culture. We also believe that highly visible store locations, creative store design, broad merchandise selection and visual
presentation are key enticements for customers to enter and explore our stores and buy merchandise. Consequently, we rely on these factors, as well as the
brand recognition created by our direct marketing activities, to draw customers into our stores, rather than on traditional forms of 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 our blogs allow us to communicate what inspires us, they allow 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, war, acts of terrorism, natural disasters, financial or political instability in any of the
countries in which goods we purchase are manufactured, trade restrictions in the form of tariffs or quotas, or both, disruption in the supply of fabrics or raw
materials, increases in the cost of fuel or decreases in the value of the U.S. dollar relative to foreign currencies could adversely affect our business. During
fiscal 2012, we purchased from approximately 3,400 vendors. No single vendor accounted for more than 10% 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. We own a 291,000 square foot distribution facility in Lancaster County, Pennsylvania that receives and distributes approximately half of
our retail store merchandise. This facility provides distribution services to our east coast retail stores at a favorable freight cost per unit, and provides for
faster turnaround from selected vendors. This facility has an advanced computerized material handling system and is located approximately 65 miles from our
home offices in Philadelphia, Pennsylvania. We also lease a 214,500 square foot distribution center located in Reno, Nevada, that receives and distributes the
remaining half of our retail store merchandise. This facility provides distribution services to our west coast retail stores at a favorable freight cost per unit, and
provides for faster turnaround from selected vendors.
We lease a 459,000 square foot fulfillment center located in Trenton, South Carolina. Currently, this facility houses the majority of merchandise
distributed through 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
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