Urban Outfitters

Reporting on its fourth quarter today, Urban Outfitters said that despite strong quarterly sales, it was taking a cautious posture going forward because "It's a very, very turbulent time in the fashion cycle." What that means is that the contemporary female customer is in the process of moving away from the distressed, bootcut denim that has filled her drawers for the past several seaons and is replacing it with skinny jeans, leggings, longer tunic tops and a return to dresses. And while Urban may be punished initially for being the first to go out with the new silhouettes, they will ultimately benefit once the trend goes coastal.

Take note that Urban only addressed apparel trends. What it didn't point out is that these trends don't favor athletic footwear whose inspiration is based in performance. If you look at Urban's current catalog, it's telling that the athletic category is much sparser than it used to be. Almost all of the featured styles are canvass, specifically Converse and Vans, whereas in the past, the company featured a wider array of SKUs by brand including Asics, Nike and Puma. Urban knows that women will be adding a feminine touch to those newer and more severe bottoms with girly flats and vintage-looking pumps.

The positive note for athletic is that it remains a strong fashion statement for men, though the men's side of Urban's business is also dominated by canvass. All told, the next six months should be interesting ones for the fashon business.