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Monday served up a proverbial headscratcher as far as mergers and acquisitions go.
Urban Outfitters, the retailer behind brands like Anthropologie, Free People and its eponymous brand, said it would acquire Vetri Family restaurant group, an Italian food chain, for an undisclosed amount. Investors were not too pleased and the stock finished the day 7.5 per cent lower.
Management took time during the third quarter earnings call to explain the rationale behind the tie-up and the move might not be entirely surprising.
The Urban brand store in Herald Square has a cafe and the company said that its experience in the food business “has taught us the potential synergies that can exist between retail and food operations”. The acquisition of the restaurant chain would help it “reach customers more and to capture more of their spending”.
On the call, a company executive said:
With casual dining growing rapidly and pizza one of the most popular foods in the country, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept.
The big attraction? “Its appeal” from the “very young to very old, everyone loves pizza”.
The Pennsylvania-based company added that this would not be limited to the Urban Outfitters brand alone. In 2017, they expect to open a larger format Anthropologie store in Devon, Pennsylvania, with a cafe, a Vetri pizzeria and one of Vetri groups’ higher end restaurants.