Urban Outfitters has earned a reputation for pushing boundaries with its controversial designs, which have been accused of everything from being anti-semitic to promoting underage drinking. But one of its latest efforts, a bizarre denim and tutu combination unearthed at a Long Island, New York store, was almost too much for analysts at Goldman Sachs.
As you can see from the above, Goldman said in a research note released on Monday, Dec. 16, it had some “incremental concern” that the company might be “too aggressive and fashion forward” with its products.
But after checking out the numbers being churned out by its other brands, Free People and Anthropologie, the investment bank cum fashion expert said it was less concerned. Either way, it is confident the retailer’s merchandise issues will only be transient and resolved by the spring.
Urban Outfitters has struggled this year, but not as badly as some of its peers in the teen retail sector. Its shares have fallen about 9% in 2013 (compared to a 34% decline for Abercrombie and Fitch and a 31% fall for American Eagle Outfitters).
Despite the fashion faux pas, Goldman upgraded its recommendation on Urban Outfitters’s shares to “buy,” describing the company as “as a baby thrown out with the specialty retail bathwater.” Basically, it likes the stock because of the company’s strong brand and the fact that it has less square footage than other retailers (less of a risk of having too many physical stores as more consumers move online).