Terrain expansion remains unresolved

Executives at Urban Outfitters say they haven't decided whether to expand its single-location, upscale, lawn-and-garden center, Terrain.

Urban Outfitters -- the $1.2 billion retailer and operator of the Anthropologie, Free People and Urban Outfitters brands -- launched the concept in May 2008 by purchasing J. Franklin Styer Nurseries, a 118-year-old garden center near Chadds Ford, Pa., one of Philadelphia’s wealthiest suburbs.

During the company's fourth-quarter earnings conference call, Urban Outfitters CFO John Kyees was asked if another Terrain was coming in 2009. His response: "The Terrain issue is not resolved yet, so we don't know."

Overall, the company intends to open 42 new stores.

For Terrain, the company converted the 10-acre nursery and added indoor and outdoor furniture, pottery and decor, personal care items, books, cooking utensils and more. In addition, there’s an established landscape design service and a cafe serving a spa-meets-farmhouse menu.

Last year, Kyees appeared much more bullish on the development of the new concept. During a Lehman Brothers retail conference, Kyees pointed to a fragmented lawn and garden market of about $85 billion, of which Home Depot and Lowe’s hold about a 35 percent share. He described a $1 billion potential for Terrain -- 50 Terrain stores doing $20 million each in annual sales.