Case Study: Urban Exters Vs. Urban Outfitters

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From the difference in inventory turnover ratio between these two companies, I can infer that American Eagle Outfitters has a much higher turnover ratio than Urban Outfitters because Urban Outfitters has a higher amount of inventory than American Eagle Outfitters. Urban Outfitters is a broker for many clothing manufacturers. It holds inventory (clothing) that is made from many other manufacturers. As a result, they have a significantly higher amount of inventory in comparison to stores that only carry in-house products. In contrast, American Eagle Outfitters sells mainly its own products, meaning that it mostly sells products that are manufactured and branded by the company itself. Since it does not carry inventory from many other manufacturers

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