The generation of millennial hipsters is notoriously progressive—or at least it pretends to be. According to a recent research study conducted by Harvard, this generation of millennials (ages 14–34) is the most liberal generation when it comes to social issues. This same group of mason-jar drinking, high-waisted shorts wearing, oversized glasses-donning, kale-munching and bicycle-riding “edgy” millennials are Urban Outfitters’ target demographic. In fact, in a memo leaked in September 2012, Chief Executive Officer Richard Hayne described the Urban Outfitters demographic as “the upscale homeless person, who has a slight degree of angst and is probably in the life stage of 18 to 26.” Herein lies the irony—this “progressive” generation supports a business infamous for frequent and blatantly offensive scandals.
Most recently, in September 2014, Urban Outfitters offered an exclusive one-of-a-kind “vintage” Kent State sweatshirt splattered with red ink, which looked eerily like blood. Referencing the 1970 Kent State massacre during a Vietnam protest, Kent State and others were quick to point out the insensitivity of this garment. On its website the university wrote: “May 4, 1970, was a watershed moment for the country and especially the Kent State family. We lost four students that day while nine others were wounded and countless others were changed forever. We take great offense to a company using our pain for publicity and profit.” Urban Outfitters hastily tweeted an apology saying, “We deeply regret that our product was perceived negatively.”
A trend emerges: Urban Outfitters releases an offensive product. A deluge of articles floods the Internet and it briefly becomes a hot conversational topic. Next, Urban Outfitters tweets a 140-character apology. Although one would hope Urban Outfitters would learn from this mistake, the company has continued to repeat the pattern again and again.
One of Urban Outfitters’ most notoriously offensive items was a game offered in 2003 entitled “Ghettopoly.” The game works like standard Monopoly, but instead of vying for Park Place and Boardwalk, the game contains properties like gun shops. The cards contain racist phrases like, “You got yo’ whole neighborhood addicted to crack. Collect $50.” In response to this unabashed racism, prominent members of the NAACP and black clergy called for a boycott of Urban Outfitters.
On top of its racist products, the company has also faced criticism for stealing independent designers’ work. In 2014, Urban Outfitters removed a $59 body-con skirt because of charges of copyright infringement from independent artist and graphic designer James Soares. The design in question was a pattern of colored triangles originally sold as a $20 print. On his Tumblr page, Soares clearly points out that his design is identical to the pattern on the skirt. A number of news outlets agreed.
Urban Outfitters’ offenses are not limited to racism and robbery; in 2013, the company sold shot glasses modeled after prescription drug containers. Drugfree.org condemned the company, saying this product was “making light of the real prescription drug abuse epidemic that’s claiming lives of teens across the country.” Again, Urban shrugged responsibility in a tweet: “We recognize that from time to time there may be individual items that are misinterpreted by people who are not our customer.”
With these scandals reoccurring for years, how does Urban Outfitters remain a profitable and popular enterprise? Why is a series of consistent ethical scandals not enough to force a company out of business?
According to Dr. Gavin Finn, CEO of Kaon Interactive and Tufts lecturer of marketing, the nature of Urban Outfitters’ scandals are not the kind of issues that typically cripple a company. In an interview with the Tufts Observer, Finn explained, “Urban Outfitters’ scandals are likely not helping business, but it’s not enough to kill them, either.” If the nature of scandal is directly related to the product the company sells, then it can produce negative economic effects. For example, if an airline is unsafe as a result of the airline’s negligence, then this scandal can be enough to bring the company out of business. But the promise Urban Outfitters makes to the consumer is not to sell exclusively ethical clothing; instead Urban prioritizes selling trendy clothing that appeal to their loyal customer base.
So what does this mean for retailers? Are brands like Urban Outfitters immortal, free to insult and disrespect anyone they choose as long as it doesn’t affect the core purpose of their business?
Historically speaking, no retail companies that have undergone similar criticisms have had to make serious public image changes to stay afloat. Mega-retailer Abercrombie and Fitch has a reputation for selling small sizes, excluding those who don’t fit into their “narrow” targeted customer profile. In 2013, after increased public outcry, the business received a barrage of bad press. A Change.org petition to “make clothes for teens of all sizes” received over 80,000 signatures. People took notice—Abercrombie and Fitch’s stock plummeted in 2013, prompting an announcement of executive changes and expanded sizes.
However, since 2013, Abercrombie’s stock has gone up 22 percent. While it’s not clear if this is a direct result of a more positive public image, it’s certainly possible that their public changes influenced their profits.
Similarly, American Apparel has consistently received negative press for its excessive sexualization of young models and sexual harassment accusations against the CEO. While these controversies garner attention at first, it doesn’t seem to be a lasting business strategy. Over the past five years, stock prices have fallen 84 percent and, as of June 2014, the company hadn’t reported a profit for 16 of the last 17 quarters. In June 2014, the company fired their infamous CEO, Dov Charney. By doing so, American Apparel gave itself the opportunity to rebrand itself and regain customer trust.
American Apparel and Abercrombie and Fitch demonstrate consumer power: financial power to force a company to make changes, or at least publicly convince people they have changed. But looking at Urban Outfitters, its unclear if people care. When 370 Tufts students were polled, 82.9 percent of those who shopped at Urban Outfitters in the past year knew about the scandals. Evidently, knowledge of the scandals is not enough to incite large-scale consumer backlash. In the case of Abercrombie and American Apparel, significant consumer outcries spurred company change. But if customers don’t acknowledge and prioritize ethical concerns, then Urban Outfitters will continue to thrive. Dr. Finn explains, “Absolutely, consumers are the primary force of power behind a company.” The pied piper that is Urban Outfitters runs solely on those that follow: a perceived immortality that relies on the hipster’s dime.