Hip-company Urban Outfitters will have to convince investors and customers that its move to acquire a pizza restaurant is the right one.
Shares fell as much as 10 per cent when the fashion retailer announced that it would take over the Vetri Family Group, a Philadelphia- based company behind the Pizzeria Vetri chain of restaurants for an undisclosed sum on Monday. Shares have now lost more than 50 per cent of their value since March this year.
But shareholders were not the only surprised. Customers also voiced their astonishment to the news on social media.
The retailer is known for its vintage vibe and promotion of products such as vinyl records and high-wasted jeans.
One user said : “So UrbanOutfitters just bought a pizza chain. My prediction: Old pizzas sold as distressed or vintage at 3x the price retail."
While others made speculations about the potential price of the food:
Others just thought the combination of food and retail didn’t make sense:
Urban Outfitters, which is also behind the brands Antropologie and Free People, has chosen to expand in the restaurant business at a time when consumers are spending less on clothes and cosmetics.
“Spending on casual dining is expanding rapidly, and thus, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept,” said Richard Hayne, Urban Outfitters CEO.
Neil Saunders, chief executive of retail research firm Conlumino, added that the deal could sap attention and cash away from Urban Outfitters and damage its clothing business.
Urban Outfitters revenue rose 1.3 per cent to $825.3 million (£542.6 million) in the third quarter, short of the $869.8 million analysts had expected.
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