The Navy Yard got a new boat this month. It isn’t a military ship and won’t be setting sail.
The decommissioned 1977 tugboat, now painted in Urban’s signature yellow and marked by its logo, is now permanently stationed outside the company’s headquarters — as a sort of mascot, to company cofounder and CEO Dick Hayne.
The tugboat’s arrival coincides with a momentous anniversary for Urban: the company’s 20th year at the Navy Yard. Urban staff started relocating 500 employees there in 2004, and the headquarters was fully operational by 2006. Now it has 15 buildings and just over 2,500 employees.
And the company is continuing to grow.
Urban’s newest addition at the Navy Yard is a 117,000-square-foot photo studio building, which opened in April.
Urban announced earlier this month that it plans to hire at least 450 workers at the Navy Yard and at least 600 at a new Bucks County facility, which is set to open by 2028. Gov. Josh Shapiro joined Hayne for the news conference, and lauded the business as a home-grown global company bringing jobs to Pennsylvania.
“We intend to stay here,” said CEO Hayne. “We have no thought of leaving.”
How Urban grew from Philly roots to global retailer
Urban was founded in 1970. The company’s roots are in West Philadelphia, where it opened its first store, a Free People. It now has almost 800 stores across the globe under the brand names Urban Outfitters, Free People, FP Movement, and Anthropologie.
Walking into an Urban store doesn’t feel like stepping into a Macy’s where there are racks of clothes and bright fluorescent lighting, said senior analyst Gerard Machado at RetailStat.
“It’s not like you’re running an errand to get something,” said Machado. “You might want to spend a little time looking at things. That’s a unique feature of Urban Outfitters.”
Similarly, customers who wander into Anthropologie find artfully arranged dinner plates and glassware amid scented candles — not just items stacked in rows on shelves.
Analysts say Urban is one of the more successful names in retail today, with strong sales numbers, loyal customers, and the ability to market to different audiences with its multiple brands. The company competes with the likes of J.Crew, Abercrombie & Fitch, Uniqlo, Ralph Lauren, Zara, and H&M.
The company grew profits by more than 15% in its most recent fiscal year, with nearly $465 million in net income in the year ending Jan. 31.
One key feature of Urban is that it’s experimental and innovative, said Neil Saunders, a retail analyst and managing director at GlobalData. Nuuly, the company’s clothing rental platform, which launched in 2019, is one of the “very few players that’s really successful” in that industry, he said. For $98 a month, subscribers get six fashionable items delivered to their door, which they can wear for a month and then ship back.
But there have been financial hurdles, too.
The Urban Outfitters brand struggled with declining sales in recent years. Gen Z consumers migrated “heavily into ultra fast fashion,” said Machado, and the brand didn’t adapt quickly enough. As merchandise piled up in inventory, Urban cut prices, which consumers grew to expect.
To turn the brand around, the company set out to rebuild relationships with customers, bring on more items attractive to Gen Z, and engage with customers on platforms they were already on, like TikTok and YouTube, The Inquirer reported in 2023. The company hired a new president to helm the brand in 2024, and it returned to profitability last year.
(function(){function e(){window.addEventListener(`message`,function(e){if(e.data[`datawrapper-height`]!==void 0){var t=document.querySelectorAll(`iframe`);for(var n in e.data[`datawrapper-height`])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data[`datawrapper-height`][n]+`px`;i.style.height=a}}})}e()})();
Tariffs have also pushed the company to adapt in part by negotiating better terms with vendors, shipping items by sea instead of air, and slightly adjusting pricing.
There have been workforce challenges too. In 2020, when a racial reckoning erupted in the country and seeped into corporate offices following the killing of George Floyd, Urban saw criticism from within its own workplace. Reports emerged of employees allegedly racially profiling customers as potential shoplifters, and some employees said people of color faced challenges to advancing their careers at the company, or reporting discrimination.
“Since 2020, we have prioritized creating a culture of inclusion and belonging at our home office, in our stores, and at our facilities,” said Meaghan Condon, Urban’s director of communications and impact, in an emailed statement this month. She said that includes training for new hires and managers focused on inclusivity.
Another key ingredient in the company’s culture: the Hayne family.
Cofounder and CEO Dick Hayne’s son, Dave, is chief technology officer and president of Nuuly, and his nephew, Azeez Hayne, is chief administrative officer. His wife, Meg, is Urban’s co-president and chief creative officer.
Together, Meg and Dick Hayne own roughly a quarter of the company shares, according to recent company filings.
Frank Conforti, chief operating officer and co-president at Urban, said the family ties are an asset and part of the culture.
Having a cofounder still at the helm has allowed Urban to focus on long-term strategy and take calculated risks, said Conforti, such as launching Nuuly. Investors weren’t all in on the idea to begin with.
Now Nuuly has over 450,000 active subscribers — more than doubling that number since 2023.
“We sort of don’t rest on what we did yesterday,” said Conforti. “It’s not about yesterday’s bestsellers.”
A more efficient process
In Urban’s newest building at the Navy Yard, rows and rows of wheeled clothing racks are spread across several rooms. Industrial metal shelves are filled with sneakers, sandals, and handbags. Lamps and armchairs wait to be photographed for e-commerce.
The space was once used for building and housing ship components, noted Jennifer Calliagas, Urban’s North America director of planning, who led the new building’s development. Urban bought it from Rhoads Industries in 2016 for an undisclosed sum.
Urban spent about $40 million to fit the space for its needs, which included stripping the building down to its structure, said chief development officer Dave Ziel. Construction started last year, and Urban employees began working in the space by mid-April.
Inside the new building are adjoining rooms to seamlessly carry out the photography process: Clothing, shoes, and accessories are received in one room, then moved into the next room to be styled, and finally to the studio where they’re photographed. Staging areas are set up to portray bedrooms and bathrooms, functioning kitchens were built for cooking food to show in photos, and plants are on hand to finish off the staged living spaces.
The Inquirer was not permitted to photograph the studios because the merchandise had not yet been released publicly.
Not long ago, the company’s photo work was done in rented studios in New York City, Calliagas said, or scattered across the company headquarters.
“Anthropologie, for instance … would be receiving in one area and then going to another building for style-outs, and then sometimes going back into another building for shooting,” Calliagas said. “It was a really inefficient process.”
At the Navy Yard, the company’s brands are housed in separate buildings, in part because they each “speak to their customer” in a different way, said Oona McCullough, executive director of investor relations. She called this kind of separation “states’ rights.”
Consolidating the photo work under one roof has freed up space in other buildings, said Ziel, which is helpful for the continued growth of brands.
“The brands are still growing pretty aggressively,” said Calliagas.
A campus with more possibilities
Conforti refers to the headquarters as a “campus,” with a “youthful” and “very collegiate” atmosphere. When bankers or investors visit the headquarters, “we tell them to dress down casual,” he said. “They drop their tie.”
In keeping with standards set long ago by Google and other Silicon Valley tech companies, the campus is full of amenities. The newer ones include pickleball courts, a basketball court, and a walking track. And there’s plenty of green space for employees to walk their dogs, which are welcome in the workplace.
Most people work in the office at least three days a week, said Conforti.
“We’re not the most red-tape, bureaucratic company,” he said. “There’s just nothing like being here on campus getting things done. There’s an efficiency to it — and there’s a community.”
On a recent Monday, Urban’s cafeteria was just about to start serving warm lunches, and a few dozen people waited in line, while others roamed the large building with its decorative pools. Some wore U.S. Navy uniforms — the cafeteria is open to the public. Options included pizza, Teriyaki beef rice bowls, and grab-and-go items like ice cream bars and boxed sushi.
CEO Hayne stopped in for a bag of chips and a wrap, seemingly unnoticed.
At the June news conference, he recalled his first impression of the Navy Yard over 20 years ago: “I drove down Broad Street, came in Kitty Hawk [Avenue], looked at all these beautiful old brick buildings from the turn of the 20th century, and I said ‘sold!’”
Then & Now: Building 18 in 1917 and in 2024. Built in 1908 and used as a machine shop, it is now part of the URBN campus. Building 16 in the background was also used as a machine shop and is now a another example of an adaptive reuse project. #discovertheyard #navyyardhistory pic.twitter.com/VutWsQwrUc
— Navy Yard Philadelphia (@NavyYardPhila) February 9, 2024
When Ziel, Urban’s chief development officer, first came to the Navy Yard with Hayne, he said, “there was nobody here.”
“There was a raccoon — that was who I saw when we looked at the first buildings,” said Ziel, who has led the company’s real estate development.
Decades later, Ziel still sees more opportunities for growth. “I have a couple excess buildings up my sleeve.”
