Urban Outfitters has a bohemian secret weapon

Urban Outfitters' smaller sister brand is exploding in popularity. 

Sales at Free People stores open at least a year grew 14% in the most recent quarter. By comparison, sales at Urban's namesake brand grew 2%. 

Free People, which is known for bohemian attire, has consistently been successful.

"Amazing is the word that comes to mind when I hear the Free People story: thirteen consecutive quarters of double-digit comp sales growth. It's a remarkable story and a tribute to the extraordinary performance of the Free People team," CEO Richard Hayne said on a conference call with analysts.

The brand drove sales through a foray into the highly profitable activewear sector with its line FP Movement.

Free People is sold at department stores in addition to its own namesake stores. Its target customers are young women in their 20s. 

The company has mastered its customers and brand positioning.

"Strong product is the lifeblood of our business and our design and merchant teams have consistently delivered compelling assortments that have repeatedly brought our customers back to the brand," David Hayne explained. He also pointed to the brand's dress collection and intimates line.

While Urban Outfitters has been criticized for not knowing its target customer, Free People's hippie aesthetic is consistent in its product line, social media accounts, and ad campaigns. Urban Outfitters markets to teen customers. Unfortunately, those customers are price-conscious and would rather shop at fast-fashion brands like Forever 21 and H&M, writes Miriam Gottfried at The Wall Street Journal. In order to turn business around, Urban Outfitters will have to resonate with older customers who are in college and beyond. The brand plans to improve store displays, designs, and advertisements. 
Perhaps Urban Outfitters should take notes from Free People's playbook. 

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