Urban Outfitters (Nasdaq: URBN) has set out to break all the rules of the business world. But make no mistake: This retailer isn't rewriting the rules of business. It's just a boneheaded company that has managed, in record time, to offend a large chunk of its customer base and the American public.
In a fit of self-destructive zeal exceeding even the legendary gaffes of retail rival Abercrombie & Fitch (NYSE: ANF), Urban Outfitters marketed, in rapid succession:
- A "Ghettopoly" knockoff of Hasbro's (NYSE: HAS) classic "Monopoly" board game.
- A T-shirt reading: "Everyone Loves A Jewish Girl," with dollar signs surrounding the text.
- Another declaring: "Voting Is for Old People."
- A third that bears the laugh-out-loud "I did Justin three times."
Having successfully offended minorities, the Jewish Anti-Defamation League, the AARP and Rock the Vote, and, um, Britney Spears (?), Urban next decided to market a refrigerator magnet called "Jesus Dress Up." This item centers on a representation of Jesus Christ nailed to a cross (bearing a placard reading variously "INRI," "TGIF," or "Hang in there, Baby"). The Christ figure can also be "dressed" with a variety of magnetic outfits, ranging from a "beanie" to a devil's mask to a ballerina's tutu and slippers.
Now, I am no retail marketing wizard, but even I know that Corollary No. 1 to Rule No. 1 of the retail world ("The customer is always right") is "Don't insult the customer." And if 75% of American consumers adhere to the Christian religion in one form or another, it appears that Urban violated that rule. Being edgy is one thing; being flat-out offensive and insensitive is something altogether different.
On the damage control front, the company fared little better. As the firestorm of consumer rage, well, raged last week, Urban refused to admit it had done anything wrong. Instead, it issued the mealymouthed statement that it "doesn't sell the dress-up Jesus to provoke or offend people, but rather to reflect a diversity of opinion among its customer base."
Yeah. That response went over real well. By Tuesday of this week, after Urban had received roughly 250,000 emails protesting its sale of the magnet set, the company decided to "diversify" its own opinion -- and stopped selling the item.
So, Urban alienated a chunk of its customer base and got a little publicity out of it, but will reap few gains from that, since it is pulling the magnet. Investors in Urban Outfitters undoubtedly signed on for the company's recent runaway success and market-differentiating approach to retailing, but probably not for this kind of controversy. While I don't own Urban shares, I think I likely speak on behalf of those who do when I suggest: "Stick to selling hip clothes and home accessories to college kids and leave the ill-considered sociopolitical remarks to others."
Fool contributor Rich Smith
owns no shares in any companies mentioned in this article.
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