It's Not About Khaki: Why Urban Outfitters Should Commit to Bridal

(MoneyWatch) 

Urban Outfitters (URBN) has handily managed to defy the downward gravitational pull of the economy racking up record sales and profits for the past two years. The Philadelphia-based apparel company -- which includes popular brands such as Anthropologie and Free People ?€"- just posted fourth quarter sales of $589 million, an increase of 16% over the comparable quarter last year. So it's no surprise that UO wants to ride the wave of such impressive growth by expanding into new markets, including bridal.

My BNET colleague Carol Tice thinks the rush down the aisle is a mistake. I say Urban's wedding concept is a match made in retail heaven for a number of reasons.

First, though bridal may be a difficult business, David's Bridal (now privately held) has performed relatively well during the recession, according to analysts. So much for getting dumped at the altar by Macy's (M). Ditto for Men's Wearhouse, whose tux sales and rentals represented over 21 percent of the Houston-based chain's $462 million net sales.

Second, it's not really fair to compare Urban with such chains. Its core offerings are more casual than formal. But so are J Crew's (JCG). And it's had a smash hit with formal wear for brides, grooms and the whole wedding party since it began carrying the goods in 2004. Even President Obama sported a white satin bow tie from J Crew to his Inaugural Ball.

Like Urban, the company had strong holiday sales and third quarter revenues rose 14 percent. A J Crew employee told me that demand for formal dresses, suits, and attendant accessories has helped the retailer maintain a steady sales base over the last few years.

Finally, like J Crew, Urban's bridal concept is not really about khaki (thank goodness). CEO Glen Senk described heirloom-quality gowns priced from $1,000 to $5,000 that will be designed by the Anthropologie team and guest designers.

Let's not forget that Anthropologie outperformed the rest of UO's brands (posting a 10 percent increase) by catering to a slightly older customer looking for unique apparel for workdays and weekends. The brand's dresses in particular, feature high end materials such as silk and linen, fine workmanship and luxe details -- all priced between $118 and $368.

Senk also mentioned offering invitations and a gift registry, "to create a community for brides," that could potentially grow to include planning services. If executed well, Urban could have the wedding of the century on its hands. I predict chapel bells and cash registers will be ringing in unison.

Photo of "Picture Show Dress" via Anthropologie.com