Potential Long Investment:

1
McIntire Investment InstituteApril 9, 2002

• Potential Long Investment
• URBAN OUTFITTERS INC.
• NASDAQ - URBN

2
URBAN OUTFITTERS IS A BUY!

• Will diversify the MII portfolio by adding Retail
• Not as susceptible to economic downturns as other
  retail corporations due to its unique niches in
  the marketplace
• Has not saturated the market, leaving plenty of
  room for future growth both nationally and
  internationally
• Well-run corporation with reputable management
• Fashion leader, instead of follower!

3

• CORPORATION CONSISTS OF
• 2 SPECIALTY RETAIL STORES
• Urban Outfitters and Anthropology
• WHOLESALE DIVISION
• Free People

4

What is URBAN RETAIL?

• operates 49 stores in large metropolitan areas
  and university communities
• targets style conscious 16-30 year old age group
  (Generation Y)
• product offerings include womens and mens
  fashion apparel, footwear and accessories, and an
  eclectic mix of apartment wares and gifts
• accounted for 54 of total sales during the past
  fiscal year

5
(No Transcript)
6

• What is Anthropology?
• -tailored to sophisticated and contemporary women
  aged 30-45
• -product offerings include womens casual
  apparel/ accessories, home furnishings and a
  diverse array of gifts and decorative items
• -operates 33 stores in specialty retail centers,
  upscale street locations and enclosed malls
• -accounted for 41 of total sales during the past
  fiscal year

7
Catalog and Websites

• URBAN RETAIL
• Website launched in May 2000
• ANTHROPOLOGY
• Direct-to-consumer catalog launched in March 1998
• Website debuted in December 1998

• Accept orders directly from consumers
• Capture the spirit of retail stores by offering a
  similar array of products
• Increase brand recognition with target customers

8

• Wholesale division, which designs,
• develops and markets young womens casual apparel
• sold worldwide through 1,100 better department
  and specialty stores, including Bloomingdale's
  and Nordstrom (helps minimize production lots)
• yields higher gross profit margins than brand
  name merchandise
• helps keep product offerings fresh
• and unique

9

• KEY STRATEGY STORE ENVIRONMENT
• Urban Outfitters store average 10,000 selling
  square feet and Anthropology store average 8,500
  selling square feet
• Large square footage encourages target customers
  to linger and spend time exploring stores and
  product offerings
• Creatively designed, retail space incorporates a
  mosaic of fixtures, finishes, and architectural
  details to create a lifestyle

10
PORTERS 5 FORCES

• Threat of New Entrants Low, Hard to imitate the
  distinct lifestyle that Urban Retail and
  Anthropology create
• Bargaining Power of Suppliers Low, No one
  supplier accounts for more than 10 of the
  companys merchandise
• Threat of Substitutes Low, There is no
  substitute for the industry. People who shop in
  Urban Outfitters and Anthropology desire a
  different look and experience than the average
  retail chain
• Bargaining Power of Customers Medium, Customers
  can go elsewhere to find better deals on the
  product offerings similar to Urban Retail and
  Anthropology, but it would be very difficult for
  both target customers to find the same array of
  product offerings at other stores

11
Porters 5 Forces (continued)

• Competition within Industry
• Retail is a competitive industry
• However, this corporation has unique retail
  operations that are distinct from the retail
  chains that Wall Street considers its competitors
• Urban Outfitters no direct competitor with
  economies of scale, customers who go to Urban
  believe that they set the trend
• Anthropology cannot find same mix of such
  diverse merchandise at any one retailer

12
REPUTABLE MANAGEMENT

• Richard Hayne President and Board of Directors
  since incorporation in 1976, co-founded Urban
  Outfitters in 1970
• Stephen A Feldman CFO
• Glen T. Senk President, Anthropology, Inc.
• Tedford G. Marlow President, Urban Outfitters
  Retail Division
• David C. Frankel President, Free People

13

• In our current financial markets, it is
  reassuring to see that Urban Retail has.
• Minimal Activity in Insider Trading
• No Corrupt Backgrounds or Poor Reputations of
  Managers and Directors
• Fair, but not outrageous compensation for
  executives

14
STRONG FINANCIAL MEASURES

• CURRENT RATIO 2.01
• WORKING CAPITAL 41.319 M
• LT DEBT TO EQUITY 0
• GROSS MARGIN 32.57
• ROA (Fiscal 2002) 14
• ROA (5 Year Average) 20.99
• ROE13.9
• INVENTORY TURNOVER 5.36
• CASH AVAILABLE AT THE END OF FISCAL 2002 21.251
  M

15
Minimal Long Term Debt!!
16
URBAN OUTFITTERS ADDS VALUE

• Return on Invested Capital23.5
• Weighted Average Cost of Capital13.9
• Spread between ROIC and WACC shows that Urban
  Outfitters has the ability to create value!

17

• URBN vs. SP 500 in the last year

18
Why should the MII Invest in Urban Outfitters?

• Mid Cap Corporation-easier to gain an edge and do
  Value-Added-Research!
• Not susceptible to great media attention and
  change in stock price is not so volatile
• Anthropology is first beginning to catch on and
  will cause substantial growth in the corporation
  as it becomes a household name in the affluent
  society
• Urban Outfitters is a long term fad that has
  continually been able to keep up with its target
  customer for over 30 years
• Free People is at a low in percentage of the
  corporations revenue and with Urban Retails
  future plans to expand the brand name, it will
  contribute to even more growth in the corporation

19
VALUE ADDED RESEARCH

• URBAN OUTFITTERSCustomers say
• No Direct Competitors, Nothing is exactly like
  Urban Outfitters in my mind , I think Urban
  Outfitters is just different from other stores.
  Whenever I am in an area with an Urban
  Outfitters, I always find myself in there buying
  something different.
• Urban sets the trend. I know when I go into
  Urban Outfitters, I can always count on getting
  the most fashionable clothes at good prices.
• I have never gone into Urban without wanting
  something.

20
VALUE ADDED RESEARCH

• ANTHROPOLOGY
• Manager says customers come for all over the
  metropolitan area to visit the Long Island, NY
  store
• He says the catalog has helped to generate
  greater interest in the products and attract new
  customers
• Customer says, This store has such interesting
  merchandise. I can really see the store growing
  in the future as more people realize what great
  things they sell.
• This is basically eclectic. It is different.
  Its not the usual thing.

21
ANY QUESTIONS???