Burlington Coat Factory: Dropping The 'Coat

Burlington, formerly known as Burlington Coat Factory, is an American national off-price department store retailer. The company dropped 'Coat Factory' from its name around 2009 to emphasise its expanded assortment of products. The company, which was first established in 1972, has grown from a single store in Burlington, New Jersey, to a large retailer with over 1,000 stores across the United States.

Burlington's expansion plans

Burlington Coat Factory, now known simply as Burlington, has had a long history of expansion since its founding in 1972. The company has grown from a single store in Burlington, New Jersey, to a major national retailer with a broad assortment of merchandise.

In the early years, Burlington Coat Factory rapidly expanded its number of stores, reaching 31 locations by 1983 and going public the same year. The company continued to grow, operating 185 stores across 39 states by 1994 and generating over $1 billion in sales. This growth was fuelled by diversification beyond its original coat business, adding men's, women's, and children's apparel, as well as furniture and linens, all at discounted prices.

By 2006, Burlington Coat Factory had been acquired by Bain Capital Partners for $2.06 billion, and the company went private. Two years later, in 2008, Tom Kingsbury became president and CEO, helping the company shake its reputation as solely a seller of affordable coats. Under Kingsbury's leadership, the company focused on its everyday-low-price model, eliminating massive promotions and emphasising its expanded assortment of products.

As of 2013, Burlington operated 500 stores in 44 states and Puerto Rico under various brand names, including Burlington Coat Factory, Cohoes Fashions, Baby Depot, and MJM Designer Shoes. The company continued to expand, joining the Fortune 500 for the first time in 2016.

In 2023, Burlington Stores Inc. reported a drop in annual sales and profits, but the company's CEO, Michael O'Sullivan, remained optimistic about future growth. Burlington Stores ended the fiscal year with 927 stores and plans to add 70 to 80 more in fiscal 2023. O'Sullivan attributed the slower growth to the lack of prime real estate locations and lingering supply issues. However, he anticipated adding 500 to 600 new stores in the coming years, taking advantage of consolidations and bankruptcies of traditional retailers.

With a focus on brick-and-mortar retail and a broad assortment of merchandise, Burlington's expansion plans aim to capitalise on the opportunities presented by the evolving retail landscape, including the closure of traditional retailers.

The impact of dropping 'coat factory' from its name

The decision to drop "Coat Factory" from its name had a significant impact on Burlington Coat Factory, now known as Burlington. This change signalled a strategic shift in the company's business model and product offerings. By removing "Coat Factory," the company communicated its evolution from solely focusing on coats and outerwear to expanding into a diverse range of clothing, accessories, and home goods. This name change allowed Burlington to position itself as a comprehensive retailer, attracting a broader customer base.

One of the primary impacts of dropping "Coat Factory" was the perception of Burlington as a multi-category retailer. The company had already started diversifying its product range in the 1980s and 1990s, adding shoes, baby products, home decor, and clothing for various demographics. By dropping the coat-specific reference in its name, Burlington reinforced its transformation into a one-stop shop for a wide array of discounted brand-name merchandise. This change helped attract customers seeking not only outerwear but also those looking for a broader selection of affordable fashion and household items.

The name change also reflected Burlington's commitment to adaptability and innovation. As the company expanded its product offerings, it recognised the need to evolve its brand identity to match its updated business model. By dropping "Coat Factory," Burlington signalled to its customers, suppliers, and competitors that it was embracing a more diverse and inclusive product range. This adaptability allowed the company to stay relevant in a dynamic retail landscape and respond effectively to changing consumer demands and market trends.

Additionally, the impact of dropping "Coat Factory" extended to Burlington's marketing and promotional strategies. With a more diverse product portfolio, the company could develop more comprehensive marketing campaigns that highlighted its expanded offerings. By shedding the coat-specific moniker, Burlington gained flexibility in its advertising and could showcase its expanded assortment of clothing, accessories, and home goods. This allowed for more creative and inclusive promotional initiatives, helping the company reach a wider audience and strengthen its market presence.

Moreover, the name change impacted Burlington's ability to establish itself as a trusted and recognisable brand. By retaining the "Burlington" part of its name, the company preserved the equity built over the years while signalling a significant shift in its business strategy. This balance between continuity and change helped maintain customer loyalty and brand recognition while also attracting new customers who may have previously perceived Burlington as solely a coat retailer.

Overall, the decision to drop "Coat Factory" from its name had far-reaching consequences for Burlington. It facilitated the company's transformation into a leading off-price retailer, offering a diverse range of products at discounted prices. By adapting its brand identity, Burlington successfully communicated its expanded product offerings, attracted a broader customer base, and solidified its position as a trusted and innovative retailer in the highly competitive fashion and home goods market.

The company's sales and stock performance

Burlington, formerly known as Burlington Coat Factory, is an American national off-price department store retailer. The company has experienced notable growth and success in terms of sales and stock performance.

Early Years

In 1972, Burlington Coat Factory opened its first store and, over time, expanded its product offerings beyond coats and jackets to include clothing, accessories, linens, baby furniture, and more. By 1983, the company had 31 locations and went public, operating under the name Burlington Coat Factory Warehouse Corporation.

Recent Developments

In the last decade, Burlington has undergone significant transformations, shedding its image as solely a seller of affordable coats. Under the leadership of CEO Thomas Kingsbury, who joined the company in 2008, Burlington has focused on its everyday-low-price model, eliminating massive promotions and emphasising its expanded assortment of products. This strategy has helped the company resonate with a broader consumer base.

In 2013, the company went public again, reporting $4.35 billion in sales for the 12-month period ending August 3, 2013. The company's stock rose impressively, increasing by more than 40% on its first day of trading in October 2013.

Recent Performance

More recently, in 2023, Burlington opened its 1,000th store and has continued to report strong financial results. In March 2024, Burlington Stores Inc. shares rose over 5% in intraday trading after the company posted better-than-expected results, with higher sales and lower inventory. The retailer's fourth-quarter adjusted earnings per share (EPS) of $3.69 and revenue increase of 13.9% to $3.13 billion exceeded estimates. Comparable store sales also rose by 2%, outpacing the company's earlier forecast of no growth or a slight loss.

As of 2024, Burlington operates over 1,000 stores in 40 states and Puerto Rico, offering discounted brand-name shoes, clothing, baby furniture, and accessories. The company has successfully navigated the challenges of the retail industry, outpacing rivals such as Ross Stores and TJX Companies in stock price performance.

Future Outlook

Looking ahead, Burlington anticipates full-year adjusted EPS of $7 to $7.60, with sales growth of 9% to 11%. The company's acquisition of leases from bankrupt Bed Bath & Beyond is expected to contribute to its continued growth.

The role of the Milstein family

The Milstein family were instrumental in the founding and growth of Burlington, formerly known as Burlington Coat Factory. The family's involvement in the business began with Monroe G. Milstein, the family patriarch, who opened the first Burlington Coat Factory store in 1972. Monroe's father, Abe, had first established the family name in retail when he opened a wholesale outerwear business in 1924.

In 1972, Monroe Milstein, with encouragement from his wife Henrietta, purchased a former factory outlet in Burlington, New Jersey, for $675,050. Henrietta's savings from her job as a librarian contributed to most of the $75,000 down payment. Initially, the Milsteins focused on selling coats and jackets, but they soon began diversifying their product offerings to reduce their dependence on the seasonal coat business. They expanded their inventory to include clothing items, accessories, linens, baby products, and shoes.

The Milsteins' strategic decisions laid the foundation for the company's growth. They chose to lease existing retail spaces instead of constructing new buildings, allowing for rapid expansion or the ability to quickly halt expansion plans as economic conditions dictated. They also opted for sparsely decorated stores, giving their outlets a 'warehouse feel' while enabling discounted prices.

In 1975, the Milsteins opened a second location in Copiague on Long Island. Lazer, Monroe's son, was asked to return from Israel to act as the legal owner of the new store, with the condition that it would remain closed on Saturdays in observance of the Sabbath. By 1983, with 31 locations, the company went public, and the Milstein family purchased a majority of the stock. The company's name was changed to Burlington Coat Factory Warehouse Corporation.

Over the years, successive generations of the Milstein family maintained control of the business. In 2006, the company was acquired by Bain Capital Partners for $2.06 billion, and the family held almost 30 million shares, resulting in significant financial gains. While Monroe Milstein was no longer associated with the business after the sale, two of his sons, Stephen and Andrew, remained briefly. The Milstein family's role in the company's early success and expansion laid the groundwork for Burlington's continued growth and transformation into a prominent off-price retailer.

The company's product diversification

The company formerly known as Burlington Coat Factory has diversified its product range significantly since its inception. The company's first store opened in 1972, selling winter coats and jackets. However, the company soon realised that relying solely on seasonal coat sales was unsustainable, and began to diversify its product line.

By the late 1980s, the company was offering a complete line of men's, women's, and children's apparel, as well as children's furniture and linens, all at discounted prices. This diversification proved to be a key strategy for the company's success, as it reduced their dependence on a single market niche within the retail clothing industry.

Over time, Burlington continued to expand its product range, adding items such as baby furniture and accessories, and even branching out into gift items and shoes. This diversification allowed the company to become less dependent on the unpredictable nature of the coat business, as well as appeal to a broader consumer base.

In addition to diversifying its product offerings, Burlington also implemented strategic initiatives to enhance its customers' shopping experience. For example, the company redesigned its stores with colour-coordinated product presentations, brighter LED lighting, and more organised clothing racks. This created a "treasure hunt" shopping experience that customers enjoyed, further contributing to the company's success.

By the early 2000s, the company had solidified its approach to doing business and positioned itself as a formidable player in the off-price retail channel. This transformation was reflected in the decision to drop the term "coat factory" from its name around 2009, emphasising its expanded assortment of products.

Today, Burlington operates over 500 stores in 40 states and Puerto Rico, offering a wide range of discounted brand-name clothing, shoes, baby furniture, accessories, and more. The company has come a long way from its roots as a coat factory, and its product diversification has been a key driver of its growth and success.

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