Urban Outfitters billionaire Dick Hayne — now trying to add to his empire with his new gardening concept, Terrain — has become one of Philadelphia’s richest, most powerful figures by understanding one not-so-simple thing: the quirks and intricacies of the female brain
Dick Hayne went shopping a couple years back.
It was spring, and Hayne, an avid vegetable gardener, needed seeds. He also needed some tomato plants, a pair of canvas gloves and a hoe, all in order to continue to cultivate the tiny patch of Eden behind his Chestnut Hill home.
So he drove to a garden center. He parked, got out of his car, walked across the lot toward the store. Then Dick Hayne stopped.
He noticed something. Namely, the other cars in the lot: a brand-new Mercedes here, some shiny BMWs there, a lustrous Escalade over there. On the other side, a shimmering sea of Jags and Saabs and Lexi.
Once inside, Hayne quickly forgot all about his shopping list. He was too busy trying to spot the owners of all those fabulous cars. Turns out they were easy to recognize: women with oversize Chanel sunglasses perched atop $400 highlights, their Lilly Pulitzer golf skirts peeking out from underneath Tory Burch tunics, accessorized by impeccable Red Door manicures that revealed a group fondness for bougainvillea and an aversion to weeding it. Going about their errands, the women stood out against the backdrop of the center’s wide gray shelving, bulky plastic supermarket carts and displays of Miracle-Gro. And thus it was there, amid the concrete aisles, that Dick Hayne found his next customers.
So when Hayne says “I’ve spent my life studying women” — and he does — this is what he means. The statement isn’t about being James Bond, but rather being Jim Cramer: seeing women not as a commodity, but as a market.
DICK HAYNE HARDLY LOOKS like a man who has his finger on the pulse of the stylish, contemporary Main Line woman. At 61, he’s got wrinkles. And odd teeth. He’s more L.L. Bean than Emporio Armani.
Yet Dick Hayne is the person who brought us Urban Outfitters (132 stores), Anthropologie (113) and Free People (19). So when he wryly describes his job as “the business of pleasing women,” he’s kind of joshing, but he’s also quite serious. For 38 years, Hayne has made a career out of quietly observing and ingeniously responding to the needs of the country’s most influential shopper: the affluent upper-middle-class woman. His parent company, Urban Outfitters, Inc., currently clothes, accessorizes and furnishes the homes of millions of American and European women ages teen-something to 40-something, turning a simple idea — give fashionable women fashionable stuff they’ll crave — into a $2 billion retail empire. You often hear of luck as a component of such success stories, but you won’t find it in Hayne’s. His is a far simpler tale, of a man with a valuable skill — a keen eye — who applied it to a group that’s completely vexing and perplexing to most other men.
At first, he observed women his age, women in his social circle. As he grew older, when he and the women in his life no longer fit the demographic, he did it by hiring new women — and men — who fit and understood his customers’ profiles. Now, he watches over a corporation of thousands of people who in turn are all wholly devoted to watching and reacting, to discovering and filling empty niches, in order to give customers — precisely divided by their ages — exactly what they want. “Dick Hayne is an incredible person,” says Standard & Poor’s retail analyst Marie Driscoll. “He is always being quoted as saying, ‘We’re not category specialists. We’re customer specialists.’”
So it’s no surprise that the average age of an Urban Outfitters salesclerk is the same as that of an Urban Outfitters patron, or that a buyer for Anthropologie is a boho-chic 30-something, just like the shopper she’s buying for. Dick Hayne won’t admit his company hires on the basis of age, or that his stores operate on a simple principle: Grab the woman in her late teens (Urban), keep her happy in her late 20s (Free People) through her early 40s (Anthropologie). The way he puts it is much more subtle. “The whole notion of branding across age groups is not a particularly smart idea,” he says. “We specifically know that’s available, and we don’t do it. The Urban kid, whom we call the ‘urban homeless’ kid, doesn’t necessarily want to have anything to do with the 30-year-old who shops at Anthropologie. I remember a long time ago when Esprit started Esprit Kids. I told them it was the wrong idea: If you’re 23 years old, the last thing you want to think is that there’s a kid that’s eight years old wearing the same thing.” The brands — the stores — instead try to capture a certain style of customer within a certain demographic. And if that customer just so happens to move from one brand to the next, all the better.
Now, Hayne is setting his sights on a whole new shopper. She’s still female, but she’s a more mature — and significantly more affluent — version than the still-want-to-be-cute-and-bohemian women who make up the Anthropologie set. She’s the well-heeled 50-plus shopper. And if all goes according to Hayne’s parking-lot-inspired plan, she’ll soon be pulling her Beemer or Benz onto the golden-gravel parking lot at Terrain, his brand-new garden center, a rustic-wood-fenced oasis located just outside of Chadds Ford.
The day I meet Hayne in Terrain’s greenhouse cafe, a jewel of a lunch spot whose peacefulness belies its location just off bustling Baltimore Pike, the late-afternoon sunlight streams in through grand glass panes, past a forested canopy of staghorn ferns. A wall planted with a patchwork of fragrant thyme varietals rises at one end of the room; at the other, burlap curtains separate the space from a quick-serve coffee, tea and toast bar. From invisible speakers, Israel Kamakawiwo’ole and his ukulele croon a soothing Hawaiian take on “Somewhere Over the Rainbow.” I’m smitten, both with Terrain and, quickly, with Dick. But then, it’s not my first time here.
I first visited Terrain in late April, about a week after its opening. For 118 years, the address — 914 Baltimore Pike in Glen Mills — belonged to the venerable and beloved J. Franklin Styer Nurseries, which greened superior landscapes in the greater Brandywine area, won endless Flower Show ribbons, and had a long-standing order with the White House for white peonies. (Officially, Terrain’s name is “Terrain at Styer’s.”) Indeed, J. Franklin Styer’s former owner Bill Simeral remains, along with an impressive handful of longtime Styer employees.
Like all businesses that survive more than a century, Styer’s changed over the years, but never so much as when it passed into Hayne’s hands in January. Today, there’s a vast barn of shade plants, and an exotic-plant conservatory where ferns, orchids, mosses, terrariums and cactus planters mingle with coffee-table books and a pair of weathered Indian doors. A row of artisan-made outdoor fountains leads to an antique Thai temple. The hardware department resembles an authentic general store, replete with a wide-plank wall of antique gardening tools, petite silver sprayers displayed on vintage shelves, organic fertilizer sold in burlap bags, and colored twine that I can’t help but covet, despite having no idea what I’d use it for. Best of all is Terrain’s main indoor shop, where tree-trunk tables that recall London’s revered Petersham Nurseries display delicate earthenware, raspberry and tangerine cushions adorn modern teak sofas, and brown-bottled botanical skin-care products look as if they’ve been perfectly handmade by Martha Stewart.
I’m not much of a gardener, but I’ve fallen fast and hard for this 11-acre plot, which feels like an expansive, colorful, peaceful, loosely but impeccably appointed backyard. Only it’s better, because everything in this yard — even in the cafe, with its Indonesian containers made from coconut trees and potted with ylang-ylang and fuchsia ($300), centerpiece herb planters ($30 to $40), and marble-topped wooden table ($650) — is for sale.
In a faded forest green polo, worn jeans and a pair of dusty hiking shoes, sitting in a red folding chair and looking over his latest creation, Hayne seems to fit right in, as if he’s just come in from a morning tending his garden. (He might have: 15 years ago, he rekindled his childhood proclivity for yard work. “It’s springtime,” he says. “Don’t you just feel like getting your hands in the dirt?”) He seems relaxed, perhaps because last year he turned over CEO duties to impeccably natty former Anthro brand president and executive VP of Urban Outfitters, Inc., Glen Senk, now charged with sweating all the nuts, bolts and bulbs. With his new title of president and chairman, Hayne is in big-picture mode, looking for new concepts like Terrain, which has a simple premise: Attract the Benz-driving women, show them a lifestyle they identify with, keep them wandering for an hour, maybe two, and watch sales go through the greenhouse roof.
“You take two people,” he says. “A woman and a man. They’re going shopping. The man has a list. For him, it’s like a chore: ‘I’ve gotta buy a shirt. I know the store I’m going to. I want there to be a stack of my size. I want to pick — and I want to get out.’ It’s the ol’ get-in-and-get-out.” He laughs. “Women, on the other hand, love the process. ‘I’m going shopping.’ That is the activity; that’s the end in and of itself. They’re not going buying, they’re going shopping. And they want things, little things of interest that might be faceted and complex. They don’t want to ‘get in and get out.’ They want to be romanced.”
While this all may smack of old-school gender stereotyping, Hayne’s theory works. He knows that the more women identify with a shop, the more time we spend in it. The more time we spend in it, the more money we spend in it. According to Hayne, his shoppers, by his count “99.9 percent women,” may browse his competitors — specialty retailers like Abercrombie & Fitch, Gap and J. Crew — for an average of 30 to 35 minutes per visit. Urban clocks its shoppers’ visits at an average 55 minutes. At Anthro, it’s closer to an hour and 15 minutes.
What makes a woman spend twice the time and loads of money in Dick Hayne’s world? It’s something Hayne’s employees reverently refer to as “The Experience.” The Experience translates to the overall good feeling a shopper gets at an Urban brand, and results from a number of factors, the main one being a sense of individuality (even though the stores all carry the same merchandise). Most of Hayne’s stores are two to three times the size of other specialty shops; the majority have stand-alone addresses at the edges of gentrifying neighborhoods. Each location employs its own artistic director, who’s charged with changing the shop’s displays as frequently as fashion changes its mind. Inside, the stores are laid out like a hip treasure hunt, meant to lure potential buyers deeper and deeper into the inventory. You find stuff you need — say, a pair of high-waisted denim sailor trousers from Free People ($138). But then you get to stuff you don’t really need, but covet (Anthro’s Astrid chair upholstered in Missoni Home’s Passiflora, $1,998). Then you find the stuff you didn’t even know you coveted until you saw it — like the “Obama for yo Mama” tee from Urban ($24).
But the most interesting thing about The Experience isn’t that Hayne created it — developing a strategy to both help your stores stand out and get people to linger inside them is hardly novel — but when he did it: during the meteoric ascent of the U.S. mega-mall. Just as America was embracing behemoth, all-encompassing retail, Hayne took his cash register in the complete opposite direction, rejecting cookie-cutter models and “planograms,” the ubiquitous schematics retailers use to establish uniform product placement among stores — in other words, making sure every store in a chain looks just like every other store in the chain. It was a contrary move, and a prescient one. Not only did his out-of-the-box locations (the first Urban was in a 20,000-square-foot warehouse near Penn; the first Anthro remains in its original and unlikely digs, a former car dealership in Wayne) save him money; they also made his customer feel like she was experiencing something unique. “It’s kind of a labyrinth,” says analyst Driscoll. “You keep walking through, delighted by each turn. … You feel like you’re discovering little things.”
The Experience became Hayne’s way of making his shoppers, his women, feel special. “You show up for a date, and you have some flowers and look like you care,” he says mirthfully, “you’re much more likely to get a second date.”
Perhaps not so coincidentally, it was a sense of romance that pushed Dick Hayne onto the road to retail supremacy. The year: 1970. The place: West Philly. The people: Hayne, his then-new bride, Judy Wicks, and Wharton student Scott Belair, a classmate of Hayne’s from Lehigh, each of them the ripe old age of 22.
Hayne, the son of a financial executive and grandson of two general-store owners, grew up in rural Ingomar in Allegheny County. In the fifth grade, his baseball skills caught the eye of Wicks. Straight out of college, the ballplayer and his fan married and spent a year in Alaska as VISTA workers before returning home, loading up their Volvo, and driving 315 miles east to meet Belair, then a student at Wharton who needed help on a project for his class in entrepreneurship. They thought it would be fun to open a store. Hell, it might even get Belair an A.
So the trio pooled their cash — $4,000 in all — rented a small storefront at 4307 Locust Street, next to Koch’s Deli, and gathered merchandise: used clothes, cheap records, hand-dyed long underwear, which they displayed atop rummaged crates and sawhorses. They named their fledgling enterprise the Free People Store. (Remember, this was a year after Woodstock.)
Something about the venture clicked with Hayne. Even the next year, when his young marriage ended (Wicks went on to found, own and operate the nearby White Dog Cafe) and Belair split for a New York job in finance (he continued to consult on future stores, remains a member of Urban’s board of directors, and got the A, by the way), Hayne stayed at Free People. He’s not sure why. At the age of 23, in 1971, he did what felt right. “We really just did what we thought was appropriate for us — what we would want,” he says now.
Hayne never attended business school — at Lehigh, he’d majored in … anthropology. He used common sense and shoe-leather research to feel his way to the top, developing a keen eye and a solid gut for what women want, both in retail goods and the experience of shopping for them. In his second Urban Outfitters, on Harvard Square in Cambridge, he noticed a part-time salesperson, a fresh-faced elementary-school substitute teacher named Sue Otto, arranging vintage Levi’s jeans according to size and polishing some glassware. Hardly revelatory marketing, but it was a first for Hayne — and it made the items sell. He approached her and asked for more input on merchandising. Twenty-seven years later, Otto remembers that moment vividly. “I was 21 at the time,” she says. “I’d worked at the Gap for a year, and I don’t think anyone there ever asked me what I thought, or what I would do.” Today, as the creative director for all 132 Urban Outfitters, she’s still responsible for all the employees who keep jeans displays neat and glasses clean. “Dick’s very good about asking his staffers, ‘Who is the customer?’” she says. “He’s also very good about training that person to be an observer.”
It’s a simple concept, really, but one rarely done well. When you yourself can’t figure your customer out — maybe because you’ve outgrown the demo, or you’re a 61-year-old man who’s preppy even by Chestnut Hill standards — you find productive, creative, plugged-in people who can. And then, most of all, you encourage those people, your employees, to tell you what they really think, to find creative solutions for improving on The Experience. In other words, learn the customer, encourage the staff, and watch your company grow. And grow. Into a beautiful … terrain.
Today, Urban Outfitters, Inc., employs nearly 1,000 staffers in its corporate HQ in the Navy Yard; 11,000 more work in U.S. and European stores and distribution centers. Hayne’s business — NASDAQ: URBN — has expanded at a consistent (and impressive) rate of 23 percent a year while maintaining equally impressive margins. TV moneyman Jim Cramer unswervingly names URBN one of his four preferred retail stocks (putting it in impressive, if less stylish, company: the other three are Wal-Mart, Costco and TJ Maxx). Recession or not, one analyst predicts that this year alone, Dick Hayne’s little lady-watching experiment will earn close to $2 billion.
Forbes estimates Hayne’s net worth at $1.6 billion, making him the world’s 743rd richest person. Not that Hayne wants me, or certainly you, to know about any of that. “Dick doesn’t do interviews,” Terrain’s publicist warned me at first.
You can see why. Type his name into Google and you’ll discover a blogosphere devoted to tearing him apart for building what appear to be sincerely progressive, left-leaning brands — and then, with his wife, donating $13,150 to Rick Santorum’s reelection campaigns in 2000 and 2006. From July 1, 2003, in Salon: “The guy who became a countercultural millionaire, selling trashy T-shirts and Puma sneakers, is bankrolling America’s leading congressional scourge of gays, lesbians and dog lovers.” (For his part, Hayne told this magazine last year that the donations were fiscally inspired, not related to family values.) Local media has contrasted his aforementioned Republican leanings with Wicks’s outspoken liberalness, a comparison that, for the record, both parties consider to be so 40 years ago. Such bad press may explain why he so assiduously avoids the spotlight. He’s the father of five, grandfather of one, and currently happily ensconced in a rather large Chestnut Hill estate with wife number three, Meg, who also happens to be the brand president of Free People.
And when he’s not cultivating his retail, he’s trying to cultivate his tomato plants. “One of the most wonderful parts of gardening is, if you came to my house and you saw a certain plant, and you said, ‘Where did you get that?,’ I’d actually want to tell you,” he says. But you’d definitely have to ask. “I can’t toot my own horn like that.”
So when he speaks of his board presidency at Springside as if that’s something given out to any capable dad, or when I hear him quietly suggest to the cafe barista at Terrain one day that she apply to graduate school at Drexel, where he is vice chair of the board, he’s doing what he does best: being low-key, observant. Dick Hayne is many things, but most of all, he’s a watcher. Adrienne Tennant, a retail analyst from Friedman, Billings who’s tracked Urban’s stock since the early 2000s, says nurturing a new concept “is his first love.”
But can Dick Hayne nurture Terrain into a powerhouse? Will those luxury cars he spied in that parking lot fuel up at $4 a gallon to bypass the big boxes and the mom-and-pop nurseries, just to obtain the ephemeral pleasure of shopping in a place that’s … prettier? Analysts are on the fence. Driscoll describes Terrain’s market as “a place that really nobody’s paying attention to.” But CEO Senk, fresh off an otherwise cheery Q1 earnings conference call, counters, “I think some of the people that cover our stock don’t understand Terrain.”
It’s definitely uncharted, er, terrain. Home Depot and Lowe’s and their warehouse-y chain brethren share the national garden market with 20,000 independently owned nurseries, which has resulted in an ongoing battle between the Bigs and the Littles. The Bigs can’t compete with the Littles on service; the Littles are going out of business trying match the Bigs’ price points. Both offer predictable stock of decorative flags and angel lawn ornaments. Meaning, there’s an opening here for a mid-size purveyor of stylish indoor-outdoor products. How much of a market is what remains to be seen. According to the National Gardening Association, Americans spent $35 billion on DIY gardening last year, and $45 billion more on landscaping services in 2006. As baby boomers retire to their organic lawns and Moroccan-themed patios, those numbers are poised to zoom northward.
On a mild mid-May evening, the night of the opening party for Terrain at Styer’s, a woodwind ensemble plays as a server adds basil leaves to flutes of champagne. Chadds Ford garden society is out in force, scooping up pin-dot lanterns while chatting about the summer forecast and how it will affect the roses. But also in attendance is Urban’s requisite “in” crowd, a sprinkling of young-Calvin-Klein designers, subtly tattooed buyers wearing knit sundresses, and fresh-faced, green-shirted garden staffers.
In the middle stands tanned and contented Dick Hayne, who, having tucked a turquoise Ralph Lauren oxford into his faded jeans, is (for him) all dressed up. I ask him about business. “I had three men come up to me separately on Sunday,” he says. “They were out shopping with their wives, and they all told me, ‘I hate to shop, but I could stay here for hours.’”
The ultimate irony of Terrain would be, fittingly, if it turns out Dick Hayne has discovered a whole new customer — men.