Urban Outfitters Has a Diversity Problem

Just buy the clothes, ladies. Don't worry your pretty little heads about the business.

In the heat of Facebook’s IPO, investors are worrying over the company’s lack of gender diversity. Forbes’ Nathaniel Parish Flannery wrote yesterday:

Although Facebook has received a lot of positive attention for its inclusion of a woman, Sheryl Sandberg, as its Chief Operating Officer, the company has not appointed a single female candidate to its board, a characteristic that makes it a lot like other major U.S. companies that have zero women on their boards such as like [sic] Urban Outfitters.

Parish Flannery’s mention of Urban comes on the heels of a column in the Philadelphia Business Journal by Patricia Coulter, CEO of the Philadelphia Urban League, who also challenges Urban on its one-dimensional board of directors. Coulter points to Urban’s inactivity on the subject even after a diversity-related controversy last year brought the company significant bad press from The Atlantic, New York Magazine, Jezebel, Forbes and other blogs and websites. One headline read: “Urban Outfitters, Inc. Needs a Woman on Their Board or Else.”

Or else what? It’s almost a year later, and the board is the same. You know why? Because it’s working for them. Last year, the company’s total net sales increased nine percent to $2.47 billion. Brick-and-mortar retail sales increased 14 percent. The chain opened 57 new stores across the country—at a time when other chains have been shutting stores down.

It’s hard to imagine a conversation with Dick Hayne about doing things differently. Why should he? He started with one tiny store in West Philly next to Koch’s Deli, and now he has a publicly traded company with five brands that earns billions of dollars a year. He’s the kind of guy who gets asked to speak at commencement addresses specifically so he can tell others how to live. The few times he’s been forced to confront change—as in the last few months, with the departure of Urban Outfitters’ top-level execs—it’s been bad for business. I imagine the status quo looks pretty good.

In her PBJ piece, Coulter put equal emphasis on race and gender—something that was sorely missed from last year’s debate. Yesterday she told the Tribune: “We’ve been trying to approach [Urban] on a level to say, ‘lets talk about this’ and we haven’t been able to get in the door. For me it’s a matter of how can we have a dialogue with them to show them the benefits of diversity—because we know they’re about making money.”

They sure are. But the problem is that phrase: “the benefits of diversity.” Coulter said she thought having more people of color at the top could drive business for Urban. Hayne is a white male Republican whose flagship brand regularly courts controversy with offensive t-shirts and board games like “Ghettopoly.” (See “‘Racist’ Navajo Attire and Seven Other Urban Outfitters Controversies.”) Is this a guy who’s really sitting in his office, chin on hand, wondering how he can get more people of color into his stores?

There’s no argument against gender and racial diversity on executive boards. The argument in favor of it, however, seems tough to articulate to these white men who have done so well without it. Maybe Mark Zuckerberg will, indeed, relent and grab some lady from the steno pool to come in and take minutes—for PR purposes. But in terms of business? The Zuck is doing just fine, thanks.

So what are the options? Coulter calls, in a very polite way, for some activism: “Why are we continuing to use our hard-earned dollars to purchase merchandise from a company that does not have our interests at heart? … we can use the power of our consumer dollars to support companies that reflect the diversity of our world.”

We can, although I wonder who “we” are. Are PBJ readers the people Hayne is worried about? Based on prior controversies, it seems the company pays attention when the kids grazing at Urban Outfitters get really, really pissed off. Right now, they probably don’t care if the board is black or white or polka-dotted. Get those kids angry enough to stop shopping, and you might see some change after all.