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The harsh reality for Anthropologie: It’s still selling the wrong clothes

An Anthropologie store in San Francisco. (David Paul Morris/Bloomberg News)
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For troubled women’s clothier Anthropologie, the first warning flags went up back in 2015. Sales were lackluster in the first quarter of the year, a slip that executives chalked up to a weak selection of dresses: Some of the silhouettes were wrong, and so were the fabric choices and price points.

Simply put: It made an unforced fashion error. And now, Anthropologie seems locked in a pattern of making the same mistake over and over again.

The retailer’s parent company, Urban Outfitters, reported Tuesday that it saw a 2.9 percent decrease in comparable sales — a measure of sales online and at stores open more than year — at the corporate division that is anchored by Anthropologie. That’s the sixth consecutive quarter that sales have fallen or have been flat on this metric.

Richard A. Hayne, the chief executive of Urban Outfitters, was blunt in his assessment of Anthropologie’s problem during a conference call with investors.

“The customer is also telling us in no uncertain terms the apparel and accessory offerings are currently off-pitch,” Hayne said.

Executives didn’t drill into detail about what, exactly, was wrong with the merchandise assortment during the holiday season, except to say that dress sales were lower than expected. That suggests that, once again, the goods weren’t catching customers’ eye. (And because dresses tend to come with relatively high price tags, this is a particularly tough category in which to drop the ball.)

[Why are sales suffering at so many women’s stores? They made bad clothes.]

So, why are the clothes not cutting it? In a research note, Neil Saunders, managing director of GlobalData Retail, may have hit on it: “Anthropologie,” he said, “is still a brand in search of a clear identity.”

Indeed, a trip to the retailer’s website is whiplash-inducing. There are plenty of the kinds of pieces that earned the brand its loyal following: A denim T-shirt dress with a novelty detail, a whimsically printed fit-and-flare, both in the $100 to $200 price range. They are feminine, a tad quirky, and you can easily imagine them being worn to brunch or a bridal shower.

But there are other garments that don’t seem to fit that mold: There’s a shapeless pink-and-white midi dress that costs $578. There’s a vertically striped cotton-rayon number with gargantuan pockets that start above the belly button and end below the hip.

It would seem these pieces represent an effort by the brand to lean into new trends, as voluminous and billowy silhouettes are lately taking center stage. But these garments would flatter only the narrowest range of body types and appeal to the most adventurous, deliberate fashionistas. In other words, Anthropologie hasn’t figured out how to translate this new aesthetic into looks that work for a mass audience.

And then there’s the baffling variation in price tags. Take, for example, a cotton, beach-ready maxi dress that costs $410.

Is there a customer for $410 frocks that will end up smudged with sand, salt water and sunscreen? You bet. But she’s shopping at Calypso St. Barth or Barneys New York, or perhaps and That big spender is not the traditional Anthropologie customer.

This illustrates the point that Saunders made in his research note: The brand doesn’t seem to know exactly who it is courting these days. And the woman who has typically shopped there is finding a selection that doesn’t seem to fit her lifestyle.

[Retailers’ struggles suggest we’re getting bored of skinny jeans]

Executives said Tuesday that they are taking steps to improve the clothing at Anthropologie. They’ve reorganized their merchant teams and have added a new merchandise manager and three new design directors. They hope to see improvement in the back half of the year.

Still, it is troubling that Anthropologie is still wrestling with these problems when it has been aware of them for a long time. A year ago, Hayne told investors, “Clearly, the task at hand for the Anthropologie team is to improve the apparel assortment.”

Anthropologie’s fashion stumbles are somewhat confounding because the business is so smartly managed in other ways. The company has long said it thinks it should have no more than 250 brick-and-mortar outlets. It has been choosy about only being in the toniest and most productive shopping centers.

That’s a move that looks highly prescient as many of its retailing counterparts are now looking to scale back bloated store portfolios. On Monday, for example, the parent company of Ann Taylor, Loft and Lane Bryant said it was working on a “fleet rationalization” plan — meaning it will be taking steps to close stores. Stores such as Gap and Macy’s have already moved in that direction.

Meanwhile, Anthropologie also appears to be having success in getting its tentacles into new categories. Its beauty division saw a “double digit” increase in comparable sales in the quarter, and its home category also continued to have momentum. Its bridal concept, Bhldn, continues to grow. That diversification of its offering could insulate it somewhat in the future from fashion fumbles.

But Hayne said on Tuesday that the intention is for apparel to “stay front and center” — underscoring how essential it is for the company to fix what has become a nagging problem.