Our panel of Industry Experts and authors of CSG Through The Ages, brings you this year’s series: Recession Busters

Businesses need vision, strategy, and the right leadership to find success even in a tough economy.

Using the vast CSG database of historical data and inside knowledge of each industry, our expert panelists have followed the trends for the last decade and selected the Top 10 companies in each segment that survived the recession.

Each month we reveal a top company that weathered the storm. We will examine what they did, how they did it, and where they are going in the future.

Urban Outfitters originated in 1972 in Philadelphia, PA, focusing on “funky” fashion and household products. Currently, Urban Outfitters Inc. is a specialty retail company which operates over 500 retail locations across five retail brands: Urban Outfitters, Anthropologie, Free People, Terrain, and BHLDN. The company offers a variety of lifestyle merchandise to defined customer niches. Products sold include apparel, footwear, accessories and home décor.

Merchandise at Urban Outfitters Inc.’s stores has been described as hip, stylish and bizarre. The company is known for catering to “hipster” culture and fashion, which incorporates an influence from past decades. Urban Outfitters’ products have been the subject of multiple controversies, particularly concerning religious and ethnic issues. At least once a year a product offends a certain group and is eventually pulled from store shelves. None the less, the company is able to overcome these obstacles and remain the loyal brand to its many devoted followers. Some say any publicity is good publicity.

Urban Outfitters Inc.’s comparable sales growth has recently been driven by higher e-commerce revenues, average transaction price and units per transactions. To attract customers and enhance its appeal, the brands create engaging store windows, visual merchandising and display, and email communications. This is a company in which new products have always performed very well.

A company’s success also has a lot to do with its people. Early this year Wendy Wurtzburger, Chief Merchandising and Design Officer, retired from Urban Outfitters Inc. It was said she was instrumental in developing new company brands. Ms. Wurtzburger had worked for Urban Outfitters since 1998. It is rare for a specialty retailer to have chief employees with such tenure. This looks positive for Urban Outfitters, and its new merchandise chief.

Urban Outfitters Inc. recently released sales figures of over $3 billion for the year ended 1/31/14. Since the figures in 2007, when the recession began, Urban Outfitters Inc. has more than doubled its annual sales. In that same time period store count has increased 77%. Urban Outfitters and its sister brands have stayed in tune with their customers’ needs and expanded stores and brands to meet those needs. During the past year, the company made significant strides towards the improvement of its supply chain system. Based on the company’s track record, its success is likely to continue.

As noted in this space last month with Family Dollar, several traditional dollar retailers actually thrived during the recession. At the same time, entirely new types of retailers were entering the marketplace. These are noteworthy as they were made possible by newly emerging technologies, starting with but by no means ending with, the creation and widespread acceptance of the Internet. Netflix is a prime example of such a company.

Founded by visionary Reed Hastings, Netflix began operations in 1997 by offering customers a new type of video rental service. Focusing primarily on the then relatively new video technology of DVDs, Netflix began offering movie subscriptions through the United States Postal Service. Quickly, Netflix became the fastest-growing USPS client.

Netflix soon began to anticipate the coming of still newer technologies. A key one for the future of the company was to be known as video streaming. The company was constantly trying to adapt its platform to increasingly offer streaming through a slowly evolving variety of initially expensive home devices. These could directly receive transmissions of pre-recorded videos, though with significant technical limitations, early-on.

As the technology evolved however, so did the popularity of Netflix. Former category killer retail chains including Blockbuster, Movie Gallery and Hollywood Video, began to see their demise during the height of the recession.

Never waning in its enthusiasm for new technologies and ideas, more recently Netflix has taken to producing TV series of its own. These offerings have rapidly changed the way Americans view TV series. A season of each series is released in one offering, usually near the start of a weekend. ‘Binge watching’ has become a commonly used term for the many who rent and view an entire series during a single weekend.

As Netflix rides the wave of new and expanded technologies, the company now bills itself as, ‘the world’s leading Internet television network with over 44 million members in 41 countries enjoying more than one billion hours of TV shows and movies per month, including original series. Talk about thriving the recession!

Within the fragmented nutritional supplement industry, Vitamin Shoppe has shown significant growth in both sales and store count over the past six years. The chain now operates over 600 locations and has expanded internationally into Canada, Panama, and India.

The company was founded in 1977 and has focused on high quality products and standards. Their customer service practices and focus on making the world healthier one life at a time has helped set it apart from its competition. The chain has a prototype size of 3,500 square feet and stocks around 16,500 products through its retail stores and website. Internet sales are a big part of their business as the company does around 10% of all sales online. The company stocks product from the top 400 national brands as well as its own private labels.

Vitamin Shoppe has had a strong performance over the past six years with sales increasing nearly 60%. The chain has experienced significant growth in store count over that same time with an increase of 77%. The most significant growth over the past six years came between 2008 and 2011 where the company added over 150 locations.

Going forward Vitamin Shoppe’s executive leadership team, headed by CEO Anthony N. Truesdale, will continue the aggressive growth strategy with plans to open 60 new stores this year. The company is investing in a new distribution center, omni-channel platforms, private label, and international expansion.

Natural Grocers by Vitamin Cottage has experienced tremendous growth over the past six years. In 2012, the company completed a successful initial public offering (IPO) and now has a market value near $1 billion. Over the past six years, the company has grown its store base 130% while sales have grown over 90%. The retailer, which focuses on natural and organic groceries and dietary supplements, has shown consistent store growth having opened 10 new stores in each of fiscal 2011 and 2012, 13 in fiscal 2013 with plans to open 15 stores in fiscal 2014. Locations are relatively small, ranging from 5,000 to 16,000 sq. ft. and sell approximately 20,000 SKU’s, including 6,000+ dietary supplements. According to company reports, 65% of total sales are generated from grocery items.

The company remains family operated by the Iselys. Margaret and Philip Isely founded the company in 1955 with a $200 loan from Margaret’s mother. After a door-to-door business model, the first retail location opened within six months. Today, children and grandchildren manage the company, and the Isely family makes up half of the board of directors. Among them are siblings Kemper Isely, Zephyr Isely and Heather Isely who sit on the board of directors with Elizabeth Isely, who joined the company through marriage to a member of the Isely family. All hold management positions at the company, and the four Iselys collectively own nearly 40% of Natural Grocers shares.

The family members continue with the original founders’ core principles: Nutrition Education, Quality, Every Day Low Pricing, Community and Employees. In 2014, a new human resource system is rolling out to enhance employee culture. In regards to future store growth, the management team has previously outlined its idea that the U.S. market can support 1,100 Natural Grocer locations. While ambitious, its relatively small retail size and untapped East Coast markets make the goal sound potentially achievable.

Founded in 1995 by Zoë and Marcus Cassimus in Birmingham, AL, Zoë’s Kitchen is another example of a recession-busting restaurant concept. Starting at fewer than 20 locations at the beginning of 2008, the concept now has more than 110 restaurants in 15 states (including several franchised locations). During that same time frame, average unit volumes have climbed from $1.134M to $1.470M, and corporate revenue has soared from less than $20M to more than $116M.

As an early participant in the fast-casual food movement, Zoë’s Kitchen offers a menu of “fresh, wholesome, Mediterranean-inspired dishes delivered with Southern hospitality.” Meals are made from scratch using preservative- and additive-free ingredients whenever possible. As we’ve noted several times in earlier posts, Greek/Mediterranean food is touted by many as the ideal diet because of its use of healthful ingredients: lean protein, seafood, olives and olive oils, nuts, and fresh produce, and Zoë’s was one of the first such concepts to begin expanding beyond its original roots.

In 2007, the founders’ son John Cassimus sold a majority interest in the company to investment firm Brentwood Associates, and in 2008 restaurant industry veteran Greg Dollarhyde joined the company as CEO. Now serving as Chairman of the Board for Zoë’s, Dollarhyde guided the company during some high-growth years. Kevin Miles, another long-time veteran of the foodservice industry, joined the company from Campero USA in 2009 and succeeded Dollarhyde as President in early 2011; he continues to lead the organization as CEO/President. In March 2014, Zoë’s Kitchen Inc. filed an S-1 disclosure statement with the Securities and Exchange Commission in preparation for becoming a publicly-held company.