Urban Outfitters just bought a pizza chain and several fine-dining restaurants. The fashion company announced Monday that it had purchased the group of restaurants, including the fast-casual chain Pizzeria Vetri, from The Vetri Family, which is based in Philadelphia.
Urban Outfitters' foray into the food business comes after several quarters of sales declines at its namesake stores. The company's stock price has lost half its value since March.
Urban Outfitters, along with the rest of the apparel industry, is suffering from sales and traffic slowdowns as consumers have started saving more and shifting their spending to experiences and big-ticket items, such as cars, homes, house renovations, and electronics.
The acquisition signals that clothes and shoes alone aren't enough to boost sales and drive traffic to Urban Outfitters' stores anymore.
And unlike retail, the restaurant business—and especially fast-casual chains—is growing.
"Spending on casual dining is expanding rapidly, and thus, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept," Richard A. Hayne, CEO of Urban Outfitters, said Monday.
Urban Outfitters will most likely start integrating Pizzeria Vetri and other new concepts into its existing and new stores. The company has already started offering food, coffee, books, and even salon services at several of its newest stores, which the company now calls "lifestyle centers."
The shift is meant to give customers more than one reason to visit an Urban Outfitters store.
"We think retailing needs to become more experiential," Dave Ziel, chief development officer for Urban Outfitters, told Philly.com. "I think there's a craving for real socialization beyond social media."
Ziel told Philly.com that people were increasingly shifting their disposable income from retail into food, and he noted that e-commerce was not a threat to the restaurant industry.
We reached out to Urban Outfitters and The Vetri Family group for comment. The company will probably reveal more details about the acquisition on Monday afternoon after its earnings release.
Pizzeria Vetri, which has two locations in Philadelphia and one in Austin, Texas, serves a rotating menu based on seasonal ingredients. The pizza is baked in a wood-fired oven and topped with premium ingredients such as smoked provolone cheese, sausage, and roasted fennel. The chain also serves salads, beer, wine, cocktails, and desserts like Nutella pizza topped with marshmallow.
Financial terms of the deal weren't disclosed.