Burlington Coat Keeps Loss Level
October 29, 2007,
Burlington, N.J. —Off-price retailer Burlington Coat Factory (BCF) continues to expect a 2% to 4% negative impact on comps as its new cash refund policy (partly an effort to cut shrinkage) plays out, said ceo Mark Nesci on the company's recent first fiscal 2008 quarter conference call.
Jack Moore, president of merchandising, marketing, planning and allocation, noted that the inventory cutback had been part of an initiative to make stores “more shoppable.” He added that BCF buyers are successfully negotiating to obtain increasing price markups. Moore said benefits will also accrue as the vendor list is trimmed and “as we grow with our most valuable resources.”
BCF recorded a net loss of $50.4 million for the first fiscal 2008 quarter ended Sept. 1, a 2.7% improvement over last year's net loss of $51.8 million for the period. The uptick was allayed to “increased sales, reduced depreciation expense and lower interest expense.”
Sales rose 3.3% for the quarter, to $678.8 million, the result of store openings, while the comp-store mark fell 2.0%.
BCF plans to re-open the 24 stores it will acquire from Value City by fall 2008 through spring 2009, part of its plan “to open more new stores each year,” said Nesci.
The 24 locations are in Ohio, Pennsylvania, New Jersey and Maryland, and Nesci characterized them as “proven retail locations” that will be part of the company's planned 22 new stores for the fiscal year. In response to an analyst question, Nesci said Value City could offer additional locations for sale in the future, in which BCF may be interested.
Asked about holiday advertising, Moore said the ad frequency would increase, noting, “When the ducks are flying, you gotta take some shots.”