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Urban Outfitters branches into casual dining with pizza chain acquisition

Clothing retailer Urban Outfitters has made the rather unusual step into casual dining and acquired a US group of restaurants including a pizzeria, as it wraps a two-year turn around plan.

The company made the announcement during an analyst call yesterday (16 November) when Richard Hayne, chief executive of Urban Oufitters said the majority stake in the Philadelphia-based Vetri Family Group comes as casual dining is "growing rapidly".

"With casual dining growing rapidly and pizza one of the most popular foods in the country, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept," he said.

Currently the Vetri Group operates 2 pizza restaurants in Philadelphia and is scheduled to open three more in the next 12 months.

"We believe future units can be stand-alone restaurants or part of a larger retail complex. A big attraction of this concept is the enormous breadth of its appeal. Very young to very old – everyone loves great pizza."

The investment in the group chimes with the end of a two-year "re-engergising" of the Urban Outfitters brand which saw the company slash spending on promotional activity while it worked to improve its fashion and quality of its offering. Although growth in the third quarter was just 1 per cent, the compnay said that strategy has worked and improvement in regular price selling drove "healthy, double-digit increases in gross profit dollars" of $52m.

Mobile-wise Urban Outfitters activated its Beacon programme across all US stores in the third quarter and reported that 65 per cent of customers receiving Beacon messages choose to interact. Also in the quarter it launched ‘Scan and Shop’ in the Urban Outfitters app, which allows customers to shop the styles in its Dress book by holding their phone up to the catalogue page while in store.

Social activity also performed well with strong increases in Instagram and Pinterest, up 76 per cent and 52 per cent, respectively, over last year.

Trish Donnelly, president Urban Outfitters North America said of the brand's social success: "Particularly exciting is that we saw engagement at this high level across all categories: women's, men's, apartment, music, electronics, beauty and intimates.

"Some of our newer, more successful social campaigns this past quarter included #uooncampus, our all store listening event, previewing Lana del Rey’s newest album, which became the #1 trending topic in the US during the hashtag launch... Because our customer is highly interested and engaged in these types of social interactions, we’ll continue to build on this opportunity, and we’re excited about our future initiatives."