Research a company

Michelle_Michy

BurglingtonSWOT.pdf

Home >Education homework help >Research a company

Burlington Coat Factory Warehouse Corporation

Company Profile

Publication Date: 27 Dec 2010

www.datamonitor.com

Asia PacificAmericasEurope, Middle East & Africa Level 46245 5th Avenue119 Farringdon Road 2 Park Street4th FloorLondon Sydney, NSW 2000New York, NY 10016EC1R 3DA AustraliaUSAUnited Kingdom

t: +61 2 8705 6900t: +1 212 686 7400t: +44 20 7551 9000 f: +61 2 8088 7405f: +1 212 686 2626f: +44 20 7551 9090 e: [email protected]: [email protected]: [email protected]

ABOUT DATAMONITOR

Datamonitor is a leading business information company specializing in industry analysis.

Through its proprietary databases and wealth of expertise, Datamonitor provides clients with unbiased expert analysis and in depth forecasts for six industry sectors: Healthcare, Technology, Automotive, Energy, Consumer Markets, and Financial Services.

The company also advises clients on the impact that new technology and eCommerce will have on their businesses. Datamonitor maintains its headquarters in London, and regional offices in New York, Frankfurt, and Hong Kong. The company serves the world's largest 5000 companies.

Datamonitor's premium reports are based on primary research with industry panels and consumers. We gather information on market segmentation, market growth and pricing, competitors and products. Our experts then interpret this data to produce detailed forecasts and actionable recommendations, helping you create new business opportunities and ideas.

Our series of company, industry and country profiles complements our premium products, providing top-level information on 10,000 companies, 2,500 industries and 50 countries. While they do not contain the highly detailed breakdowns found in premium reports, profiles give you the most important qualitative and quantitative summary information you need - including predictions and forecasts.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc.

The facts of this profile are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Burlington Coat Factory Warehouse Corporation Page 2 © Datamonitor

Burlington Coat Factory Warehouse Corporation

TABLE OF CONTENTS

Company Overview..............................................................................................4

Key Facts...............................................................................................................4

SWOT Analysis.....................................................................................................5

Burlington Coat Factory Warehouse Corporation Page 3 © Datamonitor

Burlington Coat Factory Warehouse Corporation TABLE OF CONTENTS

COMPANY OVERVIEW

Burlington Coat Factory Warehouse Corporation (Burlington or ‘the company’) is a privately held apparel and merchandise retailer. Burlington operates a chain of about 459 stores in 44 states of the US and in Puerto Rico. The company is headquartered in Burlington, New Jersey.

The company has not released its annual report. Therefore financial details are not available.

KEY FACTS

Burlington Coat Factory Warehouse CorporationHead Office 1830 Route 130 Burlington New Jersey 08016 USA

1 609 387 7800Phone

1 609 387 7071Fax

http://www.burlingtoncoatfactory.com/Web Address

Burlington Coat Factory Warehouse Corporation Page 4 © Datamonitor

Burlington Coat Factory Warehouse Corporation Company Overview

SWOT ANALYSIS

Burlington Coat Factory Warehouse Corporation (Burlington or ‘the company’) is an apparel and merchandise retailer, operating a chain of about 459 stores in the US. Burlington’s wide network of stores enhances its market penetration opportunities and increases its bargaining power with suppliers. However, if the US economy continues to recede, it would further impact the consumer’s discretionary spending capacity and in turn reduce the demand especially for Burlington’s high priced designer label products.

WeaknessesStrengths

High level of indebtednessStrong retail network in the US Weak profitabilityDiversified product portfolio

ThreatsOpportunities

Weak economic situation in the US can put pressure on the company’s top line growth

Growing online retail spend to strengthen the company’s sales and market reach

Rising labor wages in the US could adversely affect the company’s margins

Capital investment for new stores

Strengths

Strong retail network in the US

Burlington has a strong network of retail stores in the US. As of October 2010, Burlington operated 459 stores in 44 states. The company operates its stores under the brand names like Burlington Coat Factory Warehouse stores, MJM Designer Shoes, Cohoes Fashions and Super Baby Depot. The company also sells products online on its website, burlingtoncoatfactory.com. Burlington’s wide retail network enhances its market penetration opportunities and increases its bargaining power with suppliers.

Diversified product portfolio

The company offers an extensive selection of designer and fashion products for the brand-conscious consumer, such as footwear and merchandise at its MJM Designer Shoe and Cohoes Fashion, respectively. Burlington also caters to the price-conscious consumer by offering low-priced quality products such as apparel and accessories for men and women of all ages as well as home decor and furniture at its Burlington Coat Factory Warehouse stores.

Burlington Coat Factory Warehouse Corporation Page 5 © Datamonitor

Burlington Coat Factory Warehouse Corporation SWOT Analysis

In addition, the company operates a Baby Depot department store that is focused on branded apparel and merchandise for infants and toddlers. A diversified product portfolio allows Burlington to cater to a wide spectrum of consumers, thus differentiating itself from its competitors.

Weaknesses

High level of indebtedness

Burlington’s high level of debts could adversely affect its financial condition and future operations. As of October 30, 2010, the company’s total indebtedness was $1.2 billion. As a result of its indebtedness, Burlington would be required to use a portion of its cash flow from operations for its debt service payments payable for the next financial year. In addition, Burlington’s outstanding indebtedness could increase the impact of negative changes in general economic and industry conditions, as well as competitive pressures. Finally, Burlington may be unable to obtain additional financing for working capital or capital expenditures under the current credit crunch situation.

Weak profitability

Burlington has been recording weak profitability over the past few years. The company generated a net loss of $38 million for the nine months ended in October 2010, mostly attributable to interest expense that the company incurred. Similarly for the nine months ended in October 2009, the company recorded a net loss of $41.9 million. If Burlington were to continue to suffer losses, it would decline the company’s market share.

Opportunities

Growing online retail spend to strengthen the company’s sales and market reach

The online retail market in the US is growing at a rapid pace. According to the industry watchers, the US online retail sales will reach $229 billion in 2013. The market will grow at a Compound Annual Growth Rate (CAGR0 of 10% for the period spanning from 2008 to 2013.

Burlington has a significant presence in e-commerce. In addition to physical store operations, Burlington offers coats, baby apparel and accessories, maternity fashion apparel and furniture online on its website, burlingtoncoatfactory.com. Thus, the growing online retail spending will enable Burlington to earn more revenues from its online websites. A positive outlook for the online retail market will boost the company's revenues and further enhance its market reach.

Capital investment for new stores

Burlington Coat Factory Warehouse Corporation SWOT Analysis

As part of its expansion efforts in November 2010, the company opened 20 seasonal pop-up coat stores across the country. The stores are opened under the name Burlington Coat Factory Select. The opening of these stores have been well planned with the holiday season. The product offerings at these stores include men’s and women’s coats, hats, gloves and scarves. The Burlington Coat Factory Select stores range from 5,200 to 10,000 square feet in retail space and are located in major malls across the country. Thus a wide product offering combined with proximity to customers is expected to significantly boost the company’s revenue.

Threats

Weak economic situation in the US can put pressure on the company’s top line growth

Burlington primarily operates in the US. Therefore, any economic turbulence in its key market can adversely affect its revenue and profitability. Due to the economic crisis, the level of economic activities has slowed down in the US market. The unemployment rate in the US has also been moving in the range of 9.5% to 9.8% throughout 2010. In November 2010, it was reported to be as high as 9.8%. Higher the unemployment rate, lower will be the consumption expenditure as the disposable income in the hands of customers will be less.

The economic downturn has also led to a severe decline in consumer confidence, which measures the level of optimism that consumers have about the performance of the economy. The consumer confidence in the US improved marginally to 54.1 in November 2010 from 49.9 in October 2010. However, it is still low as compared to 87.3 in January 2008.

Thus, weak employment situation combined with low consumer confidence can lead to low level of consumption expenditure in the US. This can reduce the demand for the company’s offerings. Therefore a weak economic outlook for the US can put pressure on the company’s top-line growth.

Rising labor wages in the US could adversely affect the company’s margins

Labor costs have significantly increased in the US. In recent times, tight labor markets, increased overtime, government mandated increases in minimum wages and a higher proportion of full-time employees have resulted in an increase in labor costs, which could materially impact the group’s cost of operation. The federal minimum wage rate in the US was increased to $6.55 an hour effective in July 2008 and further from July 2009 it was increased to $7.25 an hour. As most of the company’s operations are located in the US, increased labor costs in the region would increase its overall cost structure and can adversely affect the company’s profit margin.

Burlington Coat Factory Warehouse Corporation SWOT Analysis

not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written

permission. However, users may print, download, or email articles for individual use.