Urban Outfitters buying Vetri restaurants

Tuesday, November 17, 2015

NEW YORK -- Shares of Urban Outfitters Inc. fell Monday as the clothing and apparel retailer moved to buy the Vetri Family group of pizza restaurants.

The stock fell $2.09, or 8.6 percent, to $22.40 in afternoon trading, making it the biggest decliner on the S&P 500.

One analyst said the unusual match may reflect an effort to draw more customers into stores.

Philadelphia-based Urban Outfitters did not disclose the purchase price of the restaurants, which include Philadelphia's Pizzeria Vetri and five other restaurants.

"Spending on casual dining is expanding rapidly, and thus, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept," said Urban Outfitters CEO Richard A. Hayne.

In a statement, Hayne said he has known Vetri Family group creator Marc Vetri for almost a decade and has partnered with him through his charitable foundation.

In a note to investors, Stifel analyst Richard E. Jaffe said there is "cross-shopping potential" between the two companies and adding Pizzeria Vetri to select stores could drive customer traffic.

He said it seems that Urban Outfitters has successfully tested adding restaurants to select stores to help drive more customer traffic as the industry as a whole faces a decline in customers at brick and mortar locations.

Urban Outfitters has 240 stores throughout the U.S., Canada and Europe. It also operates 214 Anthropologie Group stores in the U.S., Canada and Europe.