Urban Outfitters Wholesale designs, manufactures, and sells women's and men's clothing to over 1,000 specialty stores under four labels: Anthropologie, Co-Operative, Ecote, and Free People. Primary elements of the company's overall retail strategy include locating stores where their target customers are naturally concentrated; renovating and adapting existing structures to provide distinctive store environments; offering a broad mix of eclectic and fashionable brand name and private label apparel and home furnishings in the same store; and using innovative visual merchandising, striking store displays, and a distinctive mix of merchandise to present its wares.
Urban Outfitters was created in 1970 by two retail novices, anthropology graduate Richard Hayne and his former roommate at Lehigh University, Scott Belair. Hayne was just back from two years working with Eskimos in Alaska as a VISTA Volunteer; Belair was a second-year student at Wharton School of Business and needed a project for his entrepreneur workshop.
Over beer one night, the two came up with the idea of a store for college and graduate students, selling inexpensive clothes and items for dorm rooms and apartments. Pooling $5,000, they opened the Free People Store in Philadelphia, near the campus of the University of Pennsylvania. The store offered inexpensive second-hand clothing, Indian fabrics, scented candles, T-shirts, drug paraphernalia, and ethnic jewelry, in 400 square feet decorated with packing crates and beat-up furniture. "I was that market," Hayne told Dan Shaw of the New York Times in 1994, adding that "everyone associated with the store was that market."
The store was a success. "Belair got an A on the project," according to Robert La Franco in a Forbes article, "and went on to Wall Street, where he [ran] his own bankruptcy workout business." Hayne stayed with the business, adding such merchandise as coffee mugs and glassware to the product line. In 1976 he moved to larger quarters near the university, changed the store's name to Urban Outfitters, and incorporated the company. In 1980, with sales around $3 million, Hayne opened a second store, in Cambridge, Massachusetts, close to several colleges.