Burlington Stores has doubled its long-term store footprint target to 2,000 stores, up from the 1,000-store target established when the company launched its IPO in 2013.
In reporting its Q4 2020 results, Burlington said industry-wide store closures had presented a significant opportunity for the off-price chain as it begins rolling out a new, smaller store format. Burlington currently operates 761 stores across the U.S. The company is planning to open 100 new stores this year while at the same time relocating or closing 25 existing stores, bringing the net total of new stores in 2021 to 75.
“This new [store count] target takes account of the significant market share opportunity that we see ahead of us, and of the improvements we are making in our business with Burlington 2.0, in particular the significant reduction in inventory levels and the smaller store footprint that this enables,” said Michael O’Sullivan, CEO of Burlington Stores in a statement.
Burlington took the unconventional approach of shutting down its ecommerce site a year ago. O’Sullivan said at the time that the 0.5% of total sales brought in online were “not material,” and that it was nearly impossible to maintain a “treasure hunt” experience online that was cost-effective.
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Instead, the company chose to invest in streamlining its merchandising capabilities and developing the new, smaller store format.
“We believe that the key enabler of better executing the off-price model and driving growth in our business is to invest in our merchandising capabilities,” said O’Sullivan during the company’s Q3 2020 earnings call in November 2020.
Another key efficiency driver will be a reduction in store size to improve store-level productivity, said O’Sullivan on that call.
“Our real estate and store operations teams have done a lot of work in the past year on a 25,000-square-foot store prototype,” he said. “We feel good about the merchandising and operational plans that we have developed for this smaller prototype. We expect the economics of this format to be very favorable, and we anticipate that it will become a central part of our new store opening and relocation programs, especially from 2022 onwards.”
For the 13 weeks ended Jan. 30, 2021, total sales increased 4% to $2.3 billion. Comparable store sales for the quarter were flat, which the company said was reflective of significant improvement in December and January after a 10% decrease in November. The company also reported topline results from fiscal year 2020, with total sales down 21% from fiscal 2019.
“We saw comparable store sales improve sequentially as the quarter progressed, starting with a double-digit decline in November, improving to flat in December, and then accelerating to double-digit growth in January,” said O’Sullivan. “I was pleased with how we navigated this trend, and utilized core Burlington 2.0 strategies — chasing sales, buying opportunistically and operating with leaner inventories. Looking ahead, the retail environment is likely to remain unpredictable for some time. We are planning 2021 comparable store sales conservatively, but will manage liquidity to chase sales if the trend is stronger.”
