Urban Outfitters Down on Marketplace Expansion

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Urban Outfitters Down on Marketplace Expansion
Credit: © Reuters.

By Christiana Sciaudone

Investing.com -- Urban Outfitters (NASDAQ: URBN ) dropped 2% after a report it will start allowing other sellers to use its platform in a bid to fight off the giant threat that Amazon (NASDAQ: AMZN ) presents. 

The goal is to boost web traffic and revenue, The Wall Street Journal reported. Express and J. Crew are following similar paths. 

Such marketplaces are common on Amazon, Walmart (NYSE: WMT ) and others, but there is a risk of diluting their own brands. Marketplaces take a cut of each transaction, helping increase revenue.

At Amazon, third-party sellers make up almost 60% of overall retail sales, compared with 34% in 2010 and 3% a decade earlier. 

More product listings mean better placement in search results, bigger orders and fewer abandoned carts, according to Adrien Nussenbaum of Mirakl, a company that works with retailer  to add marketplaces, The Journal reported. Shoppers are more likely to leave a site without completing their purchase if they can’t find everything they are looking for, he said.

Shares of Urban Outfitters have more than doubled over the past 12 months, while revenue (aside from one quarterly pandemic dip) has remained relatively steady in the past few years. The company has a price to earnings ration of about 20, compared to the average for the Nasdaq of about 35, according to Bloomberg.




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