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Anthropologie’s dresses got too ridiculous for even its most loyal customers

Anthropologie at The Grove shopping mall in Los Angeles. (Bloomberg News)

Anthropologie got off to a weak start in 2015.

Its parent company, Urban Outfitters, reported this week that the chain delivered a “disappointing” first quarter, in large part due to a simple misstep:  The lineup of dresses in its stores this spring was just not that appealing.

If you’re a regular Anthropologie shopper and you weren’t impressed by the glut of billowy maxi dresses and wallet-busting cocktail frocks, you are apparently not alone: Executives said on a conference call with investors this week said that “styling misses” in the dress category were a key reason that the Anthropologie division delivered a meager 1 percent increase in sales at stores open more than a year. That is a significant slowdown in growth from recent quarters.

“Dress shortfalls came from missed opportunities in a few key silhouettes, fabrics and price points, as well as insufficiently addressing our more casual customer,“ said David W. McCreight, chief executive of Urban Outfitters’ Anthropologie group.

In addition to the weakness in dresses, the brand said its accessory category, which includes shoes, bags and jewelry, underperformed in the quarter.

There’s a lesson for Anthropologie and the broader retail industry in the dress debacle. In a hyper-competitive retail environment, even a business with ultra-loyal shoppers can be wounded swiftly by a style misfire.

Shopping at Anthropologie has never been a value play. For years, the chain has been something of an anomaly in the mid-priced women’s apparel business, as it hasn’t depended on the steady stream of promotions that have become the norm at rivals J. Crew, Ann Taylor, Macy’s and Banana Republic.

In fact, the “25 percent off your purchase”-type offers at those retailers have become so commonplace that many women now know better than to open their wallets without them.

Anthropologie, meanwhile, has largely stayed out of the promotional fray, persuading shoppers to pay full price for its $98 peplum tops, $268 sheath dresses and $178 caftans. As it continued to deliver solid sales growth, it was effectively serving quarter after quarter of humble pie to its competitors who couldn’t make a sale without an eye-popping discount. Middle-class shoppers, Anthropologie proved, will indeed pay full price if the fashion feels distinctive and well-crafted.

But, this quarter, when the dresses didn’t fit shoppers’ lifestyles or when the hefty price tag didn’t seem commensurate with the uniqueness and craftsmanship of the dress, customers balked.

Anthropologie expects that it can bounce back quickly from the dress problem; McCreight called it “certainly correctable, if not downright avoidable.” Executives said the merchandise set to hit stores in June and July is expected to be more in line with customers’ desires on price and aesthetic.

Sales in Anthropologie’s home category and some other clothing categories remained healthy, suggesting that its customer hasn’t abandoned the brand — she just wasn’t enticed by the dress options.

Anthropologie is looking for new ways to channel its carefully crafted bohemian-meets-romantic aesthetic. Sales at its nascent concept for brides and bridesmaids, Bhldn, are “skyrocketing,” according to the company.  It is also experimenting with a home and furnishing concept called Terrain that is similar in look and feel to the Anthropologie brand.

In each of these ventures, it seems, it will be important to be vigilant about keeping the vibe and prices of the goods consistent with customers’ expectations.