Urban Outfitters Shares Got Crushed: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of hip clothing retailer Urban Outfitters (NAS: URBN) were getting unceremoniously undressed by the market today, losing as much as 20% in intraday trading after the company announced that CEO Glen Senk has resigned.
So what: Senk has been the CEO of Urban Outfitters since 2007, but he's been with the company for 18 years and was instrumental in building the Anthropologie brand. Analysts -- and obviously many investors -- are concerned that Senk's departure will leave Urban Outfitters directionless at a time when the company has already been stumbling a bit. The company's press release said that Senk was leaving "to pursue another opportunity."
Now what: When it comes to company management, I have a definite preference toward a particular type of CEO. Namely, I like a CEO who's been with the company a long time -- perhaps is even a founder -- and owns a substantial stake in the company. So who's taking over at Urban Outfitters? None other than Richard Hayne, the company's co-founder and chairman, and owner of 22% of the company.
To be sure, there's reason to be concerned that Senk is splitting right now. But as a shareholder myself, I'm actually pretty stoked to see Hayne stepping back into the CEO role. In that view, I'm completely on board with my fellow Fool Alyce Lomax -- a longtime owner of Urban Outfitters stock herself.
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At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer owns shares of Urban Outfitters, but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.
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