Burlington Coat Factory Investments Holdings, Inc. Burlington Coat Factory Investments Holdings, Inc. SWOT Analysis Strengths Weaknesses Burlington Coat Factory Investments Holdings,

Burlington Coat Factory Investments Holdings, Inc.

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Burlington Coat Factory

Investments Holdings, Inc.

Fast Facts

Headquarters Address 1830 Route 130 North, Burlington, 08016,

United States of America

Telephone + 1 609 3877800

Fax + 1 609 5897839

Website www.burlingtoncoatfactory.com

Ticker Symbol, Stock Exchange N/A

Number of Employees 27,789

Fiscal Year End February

Revenue (in US$ million) 4,166.00

SWOT Analysis

Strengths Weaknesses

Multiple store brands High dependence on leased stores

Steady revenue growth Seasonality of business

Strong retail network

Opportunities Threats

Growth of web-based store concept Changes in fashion trends

Increase in consumer spending in the

US Increase in counterfeit products

Strategic growth initiatives Rising manpower costs

Recent Developments

Jan 15, 2009 : Burlington Coat Factory December

comparative store sales down

Jan 15, 2009 : Burlington Coat Factory Q2 net income

down

Oct 15, 2008 : Burlington Coat Factory Q1 net loss

down

Burlington Coat Factory Investments

Holdings, Inc. - Company Overview

Burlington Coat Factory Investments Holdings,

Inc. (Burlington Coat Factory) operates a chain of

apparel and home product retail stores in the US

and Puerto Rico. The store chain offers an

extensive collection of ladies sportswear,

menswear, coats, family footwear, baby furniture

and related accessories. The company also

retails a comprehensive range of home decor and

gift items. The company operates stores under

Burlington Coat Factory, MJM Designer Shoes,

Super Baby Depot, Cohoes Fashions and

Burlington Shoes banners. As of February 2013,

the company operated a total of 500 stores

spread across 44 states of the US and Puerto

Rico besides operating an internet store. The

company is privately held by Bain Capital

Partners, LLC. Burlington Coat Factory is

headquartered in Burlington, New Jersey, the US.

Key Competitors

Ashley Furniture Industries, Inc.

Bed Bath & Beyond Inc. (Ticker: BBBY)

Berkshire Hathaway, Inc. (Ticker: BRK.A)

Dillard's, Inc. (Ticker: DDS)

The TJX Companies, Inc. (Ticker: TJX)


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TABLE OF CONTENTS

1 Burlington Coat Factory Investments Holdings, Inc. - Key Employees ................................................... 4

2 Burlington Coat Factory Investments Holdings, Inc. - Key Employee Biographies ................................ 5

3 Burlington Coat Factory Investments Holdings, Inc. - Major Products and Services ............................. 6

4 Burlington Coat Factory Investments Holdings, Inc. - History ................................................................. 7

5 Burlington Coat Factory Investments Holdings, Inc. - Company Statement ........................................... 8

6 Burlington Coat Factory Investments Holdings, Inc. - Locations and Subsidiaries ............................. 11

6.1 Burlington Coat Factory Investments Holdings, Inc. - Head Office ......................................................................... 11

6.2 Burlington Coat Factory Investments Holdings, Inc. - Other Locations and Subsidiaries ...................................... 11

7 Burlington Coat Factory Investments Holdings, Inc. - Business Analysis ............................................ 13

7.1 Burlington Coat Factory Investments Holdings, Inc. - Company Overview ............................................................ 13

7.2 Burlington Coat Factory Investments Holdings, Inc. - Business Description .......................................................... 13

8 Burlington Coat Factory Investments Holdings, Inc. - SWOT Analysis ................................................. 14

8.1 Burlington Coat Factory Investments Holdings, Inc. - SWOT Analysis - Overview ................................................ 14

8.2 Burlington Coat Factory Investments Holdings, Inc. - Strengths ............................................................................ 14

8.2.1 Strength - Multiple store brands .......................................................................................................................... 14

8.2.2 Strength - Strong retail network .......................................................................................................................... 14

8.2.3 Strength - Steady revenue growth ...................................................................................................................... 14

8.3 Burlington Coat Factory Investments Holdings, Inc. - Weaknesses ....................................................................... 14

8.3.1 Weaknesses - High dependence on leased stores ............................................................................................ 14

8.3.2 Weaknesses - Seasonality of business .............................................................................................................. 15

8.4 Burlington Coat Factory Investments Holdings, Inc. - Opportunities ...................................................................... 15

8.4.1 Opportunities - Strategic growth initiatives ......................................................................................................... 15

8.4.2 Opportunities - Increase in consumer spending in the US ................................................................................. 15

8.4.3 Opportunities - Growth of web-based store concept .......................................................................................... 15

8.5 Burlington Coat Factory Investments Holdings, Inc. - Threats ............................................................................... 16

8.5.1 Threats - Rising manpower costs ....................................................................................................................... 16

8.5.2 Threats - Increase in counterfeit products .......................................................................................................... 16

8.5.3 Threats - Changes in fashion trends ................................................................................................................... 16

9 Burlington Coat Factory Investments Holdings, Inc. - Recent Developments ...................................... 17

10 Appendix .................................................................................................................................................... 18

10.1 Methodology ............................................................................................................................................................ 18

10.2 Disclaimer ................................................................................................................................................................ 18


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List of Tables

Table 1: Burlington Coat Factory Investments Holdings, Inc. - Key Employees ....................................................................... 4

Table 2: Burlington Coat Factory Investments Holdings, Inc. - Key Employee Biographies ..................................................... 5

Table 3: Burlington Coat Factory Investments Holdings, Inc. - Major Products and Services .................................................. 6

Table 4: Burlington Coat Factory Investments Holdings, Inc. - History ..................................................................................... 7

Table 5: Burlington Coat Factory Investments Holdings, Inc. - Subsidiaries .......................................................................... 11


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1 Burlington Coat Factory Investments Holdings, Inc. - Key

Employees

Table 1: Burlington Coat Factory Investments Holdings, Inc. - Key Employees

Name Job Title Board Level Since Age

Thomas A. Kingsbury Chief Executive Officer, President,

Director Executive Board 2008 60

Joyce Manning Magrini Executive Vice President - Human

Resources Senior Management

Hobart Sichel Chief Marketing Officer, Executive Vice

President Senior Management 2011 48

John Crimmins Senior Vice President, Chief Accounting

Officer Senior Management

Paul Metcalf Executive Vice President, Chief

Merchandising Officer Senior Management 2012 52

Mike Metheny

Executive Vice President - Supply

Chain, Procurement and Profit

Improvement

Senior Management 2012 46

Tricia Patrick Director Non Executive Board 2012 32

Paul J. Sullivan Director Non Executive Board 2012 65

Joshua Bekenstein Director Non Executive Board 2006 54

Jordan Hitch Director Non Executive Board 2006 46

Mark Verdi Director Non Executive Board 2007 46

Source: Canadean


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2 Burlington Coat Factory Investments Holdings, Inc. - Key

Employee Biographies

Table 2: Burlington Coat Factory Investments Holdings, Inc. - Key Employee Biographies

Thomas A. Kingsbury

Job Title : Chief Executive Officer, President, Director

Since : 2008

Age : 60

Mr. Kingsbury has been the President, Chief Executive Officer and

a Director of the company since 2008. Prior to joining the

company, he served as the Senior Executive Vice President of

Information Services, E-Commerce, Marketing and Business

Development of Kohl’s Corporation from August 2006 to December

2008. Prior to joining Kohl’s, Mr. Kingsbury served in various

management positions with The May Department Stores Company

commencing in 1976 and as the President and the Chief Executive

Officer of the Filene’s division since February 2000.

Todd Weyhrich

Job Title :

Mr. Weyhrich has been an Executive Vice President and the Chief

Financial Officer of the company since 2007. Prior to joining the

company, he served as the Chief Financial Officer of Arby’s

Restaurant Group, Inc. from May 2004 to June 2006. Mr. Weyhrich

served as the Senior Vice President of Merger Integration of The

Sports Authority from February 2003 to August 2003 and as the

Senior Vice President and the Chief Accounting Officer and

Logistics of The Sports Authority from February 2001 to February

2003. Prior to this, he worked as the Senior Vice President of

Finance and Logistics from 2000 to 2001 and the Vice President

and Controller from 1995 to 2000 of Pamida Holdings Corporation.

Hobart Sichel

Job Title : Chief Marketing Officer, Executive Vice President

Since : 2011

Age : 48

Mr. Sichel has been an Executive Vice President and the Chief

Marketing Officer of the company since May 2011. Prior to joining

the company and since 1998, he was at McKinsey & Company,

where he was most recently a Principal and co-led McKinsey’s

Retail Marketing practice in North America. Prior to 1998, Mr.

Sichel worked in various capacities across consumer facing

industries including retail, e-Commerce, packaged goods, financial

services, and media.

Paul Metcalf

Job Title : Executive Vice President, Chief Merchandising Officer

Mr. Metcalf has been the Chief Merchandising Officer and an

Executive Vice President of the company since 2012. He previously

served as the Senior Vice President and the Chief Merchandising

Officer - Women’s Apparel at TJX Companies, Inc. from October

2008 to December 2011 and as the General Merchandise Manager

- Men’s from October 2006 to October 2009. Prior to this he worked

in various merchandising positions within The May Department

Stores Company from 1987 to 2006.

Source: Canadean


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3 Burlington Coat Factory Investments Holdings, Inc. - Major

Products and Services

Burlington Coat Factory Investments Holdings, Inc. is an off-price apparel and home product retailer based in the

US. The key products and services offered by the company include the following:

Table 3: Burlington Coat Factory Investments Holdings, Inc. - Major Products and Services

Products:

Ladies wear

Menswear

Coats

Footwear

Nursery furniture and accessories

Home decor

Gifts

Services:

Home delivery

Retail

E-retail

Banners:

Burlington Coat Factory Warehouse

Cohoes Fashions

MJM Designer Shoes

Super Baby Depot

Luxury Linens

Source: Canadean


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4 Burlington Coat Factory Investments Holdings, Inc. - History

Table 4: Burlington Coat Factory Investments Holdings, Inc. - History

Year Event type Description

2012

Corporate Changes/Expansions

The company opened 25 new Burlington Coat Factory stores.

2012

Business / Operations Closure

The company closed two Burlington Coat Factory stores.

2011


The company closed one company-owned store, one MJM store and one Super Baby

Depot.

2011


The company opened 20 Burlington Coat Factory stores.

2007


The company opened 19 Burlington Coat Factory stores.

2007


The company closed three Burlington Coat Factory stores, one MJM Shoe store, one

Super Baby Depot store and three Cohoes Fashion stores.

2007


The company converted its two Cohoes stores to Burlington Coat Factory stores.

2006

Ownership Changes

The company was acquired by Bain Capital Partners.

2006


Burlington Coat Factory was organized.

2000

New Products/Services

The company launched its electronic national baby registry and all 236 of the company's

Baby Depot departments were linked to this service.

2000

New Products/Services

Burlington Coat Factory launched its online discount store at www.coat.com.

1997


The company started its own shoe department.

1987


The company expanded its operations by adding a linen department.

1983


The company’s subsidiary Burlington Coat Factory Warehouse Corp. was

reincorporated.

1972

Incorporation/Establishment

Burlington Coat Factory Investments Holdings, Inc. was established as a subsidiary of

Burlington Coat Factory Holdings, Inc.

Source: Canadean


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5 Burlington Coat Factory Investments Holdings, Inc. -

Company Statement

A statement from management discussion and analysis section of Burlington Coat Factory Investments Holdings, Inc. is

given below. The statement has been taken from the company's 2013 10-K.

Overview of Fiscal 2012 Operating Results

• We generated total revenues of $4,165.5 million.

• Net sales for Fiscal 2012 increased $277.3 million, or 7.2%, to $4,131.4 million, primarily attributable to an increase in net

sales from new stores and previously opened stores in non comparable sales periods (non comparable stores) of $197.0

million.

• Comparable store sales increased 1.2% during the year.

• Gross margin as a percentage of net sales increased slightly during Fiscal 2012 to 38.8% from 38.7% in Fiscal 2011.

• Selling and administrative expenses as a percentage of net sales during Fiscal 2012 increased to 31.9% for Fiscal 2012

from 31.5% for Fiscal 2011. Total selling and administrative expenses increased $101.6 million from $1,215.3 million during

Fiscal 2011 to $1,316.9 million, during Fiscal 2012, which includes $67.0 million related to the opening of 23 net new stores

during Fiscal 2012 as well as stores that opened during Fiscal 2011 that did not operate for a full 52 weeks.

• We recorded net income of $25.3 million for Fiscal 2012 compared with a net loss of $6.3 million for Fiscal 2011.

Store Openings, Closings, and Relocations

During Fiscal 2012, we opened 25 new BCF stores and closed two BCF stores. As of February 2, 2013, we operated 500

stores, inclusive of an internet store, under the names “Burlington Coat Factory” (482 stores), “Cohoes Fashions” (two

stores), “Super Baby Depot” (two stores), “MJM Designer Shoes” (13 stores) and “Burlington Shoes” (one store).We

continue to pursue our growth plans and invest in capital projects that meet our required financial thresholds. During the

fiscal year ending February 1, 2014 (Fiscal 2013), we plan to open between 20 and 28 new stores.

Ongoing Initiatives for Fiscal 2013

We continue to focus on a number of ongoing initiatives aimed at increasing our overall profitability by improving our

comparable store sales trends, increasing total sales growth and reducing expenses. These initiatives include, but are not

limited to:

I. Driving Comparable Store Sales Growth. We intend to continue to increase comparable store sales through the

following initiatives:

(a) Refining Execution of the Off-Price Model. We will continue to drive comparable sales by expanding the vendor

base, testing and reacting to new trends, delivering exceptional value and flowing goods weekly to ensure freshness on the

floor. We also intend to continue to use our business intelligence systems to identify sell-through rates by product, capitalize

on strong performing categories, identify and buy into new fashion trends and opportunistically acquire products in the

marketplace. In early 2012, we instituted a Merchant Scorecard that rates products across four key attributes— fashion,

quality, brand and price—to help formalize a framework for buying decisions. Additionally, we believe many of our recent

initiatives, including our allocation and markdown optimization systems, will allow us to deliver improved value to our

customers, further driving comparable store sales growth.


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(b) Sharpening Focus on Our Core Female Customer. We have focused on better serving our core female customer—a

brand-conscious fashion enthusiast, aged 25-49—by improving and expanding our offerings for her and by building on our

strength in categories for her family, such as youth and baby, special occasions and menswear. We believe that these

efforts will increase the frequency of her visits and her average spend, further improving the comparable store sales

performance in women’s categories.

(c) Continuing to Improve Our Customer Experience. We have significantly enhanced the store experience and ease of

shopping at all of our stores by implementing a comprehensive program focused on offering more brands and styles and

simplifying store navigation. We have accomplished this by utilizing clear way-finding signs and distinct product signage,

highlighting key brands and new arrivals, improving organization of the floor space, reducing rack density, facilitating quicker

checkouts and delivering better customer service. We have made particular improvements in product size visibility, queuing

and fitting rooms. To ensure consistent execution of our customer experience priorities, we have improved our store

associate training and reorganized and strengthened our field management organization. Our improved customer

experience, in conjunction with more consistent in-store execution, has contributed to a significant increase in overall

customer satisfaction scores over the last two years. We have also implemented operational audits to measure performance

against clearly articulated operational standards. To date, stores that have achieved superior audit scores have generated

materially higher comparable store sales.

Table of Contents

(d) Increasing Our e-Commerce Sales. We have been selling to our customers online for more than a decade. We plan

to leverage this heritage, along with our renewed focus on e-commerce, to expand our online assortment and utilize e-

commerce strategies to drive incremental traffic to our stores.

(e) Enhancing Existing Categories and Introduce New Ones. We have opportunities to expand the depth and breadth of

certain existing categories such as ladies’ apparel, children’s products and home décor, while continuing to remain the

destination for coats, and maintaining the flexibility to introduce new categories such as pet related merchandise.

II. Expanding and Enhancing Our Retail Store Base

(a) Adhere to an Opportunistic yet Disciplined Real Estate Strategy. We have grown our store base consistently since

our founding in 1972, developing more than 99% of our stores organically, rather than through acquisition. We believe there

is significant opportunity to expand our retail store base in the United States. In line with recent growth, our goal is to open

approximately 20 to 25 new stores annually and continue to do so for the foreseeable future.

(b) Maintaining Focus on Unit Economics and Returns. We have adopted a prudent approach to new store openings

with a specific focus on achieving attractive unit economics and returns. This focus is demonstrated by the fact that the vast

majority of our existing stores have positive EBITDA for Fiscal 2012. By focusing on opening stores with attractive unit

economics we are able to minimize costs associated with store relocations and closures, achieve attractive returns on

capital and continue to grow Company margins. We continue to explore the potential for modified store formats to provide

incremental growth.

(c) Enhancing the Store Experience through Store Refreshes and Remodels. 64% of our stores are new or have been

refreshed, remodeled or relocated since 2006. In our refreshed and remodeled stores, we have incorporated new flooring,

painting, lighting and graphics, relocated our fitting rooms to maximize productive selling space and made various other

improvements as appropriate by location. We continue to invest in store refreshes and remodels on a store-by-store basis

where appropriate, taking into consideration the age, sales and profitability of a store, as well as the potential impact to the

customer shopping experience.


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III. Enhancing Operating Margins: We intend to increase our operating margins through the following initiatives:

(a) Improving Inventory Management. We continue to improve inventory freshness by focusing on receipt flows by

month and actively managing 60 day and older inventory. In addition, we plan to continue to reduce comparable store

inventories which we believe will result in faster inventory turnover and reduced markdowns.

(b) Optimizing Logistics and Distribution. We believe executing the strategy to support more in-season and opportunistic

buying as well as measured expansion of pack and hold initiatives will assist in maximizing sales and total margin dollars.

(c) Driving Operating Leverage. We believe that we will be able to leverage our growing sales over the fixed costs of

our business. In addition, we are focused on continuing to improve the efficiency of our corporate and in-store operations

through better people, processes and systems.


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Locations and Subsidiaries

6.1 Burlington Coat Factory Investments Holdings, Inc. - Head Office


1830 Route 130 North

Burlington

Zip: 08016


Tel: + 1 609 3877800

Fax: + 1 609 5897839

6.2 Burlington Coat Factory Investments Holdings, Inc. - Other Locations and Subsidiaries

Table 5: Burlington Coat Factory Investments Holdings, Inc. - Subsidiaries

Burlington Coat Factory of Alabama, LLC


Burlington Coat Factory of Arizona, LLC


Baby Depot of California, LLC

1830 Route 130

North Burlington

Zip: 08016


Burlington Coat Factory Realty of Dublin, Inc.


MJM Designer Shoes of California, LLC


Cohoes Fashions of Connecticut, LLC


Burlington Coat Factory of Texas, Inc


Burlington Coat Factory of Florida, LLC


Burlington Coat Factory of Hawaii, LLC


Burlington Coat Factory of Kansas, LLC


Burlington Coat Factory of Michigan, LLC


Burlington Coat Factory Warehouse of Redford, Inc.



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Table 5: Burlington Coat Factory Investments Holdings, Inc. - Subsidiaries

Burlington Coat Factory of New Jersey, LLC


Burlington Coat Factory of North Carolina, LLC


Burlington Coat Factory of Virginia, LLC


Source: Canadean


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Business Analysis

7.1 Burlington Coat Factory Investments Holdings, Inc. - Company Overview

Burlington Coat Factory Investments Holdings, Inc. (Burlington Coat Factory) operates a chain of apparel and home product

retail stores in the US and Puerto Rico. The store chain offers an extensive collection of ladies sportswear, menswear,

coats, family footwear, baby furniture and related accessories. The company also retails a comprehensive range of home

decor and gift items. The company operates stores under Burlington Coat Factory, MJM Designer Shoes, Super Baby

Depot, Cohoes Fashions and Burlington Shoes banners. As of February 2013, the company operated a total of 500 stores

spread across 44 states of the US and Puerto Rico besides operating an internet store. The company is privately held by

Bain Capital Partners, LLC. Burlington Coat Factory is headquartered in Burlington, New Jersey, the US.

7.2 Burlington Coat Factory Investments Holdings, Inc. - Business Description

Burlington Coat Factory is a retailer of branded apparel and home products. The company operates as a subsidiary of Bain

Capital Partners, LLC. Burlington Coat Factory primarily retails coats and outerwear. It also offers collection of ladies

sportswear, menswear, family footwear, accessories, baby furniture, home decor and gift items. As of February 2013, the

company operated a total network of 500 stores, inclusive of an internet store, in 44 states of the US and Puerto Rico.

The company operates stores under Burlington Coat Factory, MJM Designer Shoes, Super Baby Depot, Cohoes Fashions

and Burlington Shoes banners.

Currently, the company operates a total of 482 stores under its flagship brand Burlington Coat Factory. The stores offer a

complete line of value-priced apparel, including: ladies sportswear, menswear, family footwear, coats, baby furniture,

accessories, home decor and gifts.

Under the Cohoes Fashions banner the company offers a selective designer series of ladies clothing, men and children’s

garments, shoes and accessories under various brands. The stores also carry decorative gifts and home furnishings. As of

February 2013, the company operated two Cohoes Fashions stores.

The company operates 13 designer shoe retail stores under MJM Designer Shoes banner. The stores offer a wide collection

of footwear including designer and fashion shoes, sandals, boots and sneakers. MJM Designer Shoes also retails

accessories such as handbags, wallets, belts, socks, hosiery and novelty gifts. In addition, the company operates one

Burlington Shoes bannered store offering a collection of moderately priced designer and fashion shoes.

Burlington Coat Factory operates Super Baby Depot bannered stores offering a comprehensive range of apparel, furniture

and accessories for babies and toddlers. As of February 2013, the company operated two Super Baby Depot stores.

In addition, the company operates Luxury Linens departments in most of its retail stores. These departments provide a

range of bedding, kitchen and bathroom accessories, house wares and gift items. These products are sold at a discounted

price.

The company operates two distribution centers, located in Edgewater Park, New Jersey and San Bernardino, California. The

distribution centers include processing and storage capacity, and cover an aggregate space of 1,088,000 sq. ft. Aprt from

this, the company operates distribution facilities in Burlington, New Jersey and Redlands, California.


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8 Burlington Coat Factory Investments Holdings, Inc. - SWOT

Analysis

8.1 Burlington Coat Factory Investments Holdings, Inc. - SWOT Analysis - Overview

Burlington Coat Factory Investments Holdings, Inc. (Burlington Coat Factory) operates a chain of apparel and home product

retail stores in the US and Puerto Rico. The company’s strong retail network, multiple store brands and increase in revenues

have strengthened its position in the market. In addition, increase in consumer spending levels in the US, strategic growth

initiatives and growth of web-based store concept ensure a positive future for the company. However, high dependence on

leased stores and seasonality of business remains as areas of concern. Furthermore, it faces challenges from changes in

fashion trends, increase in counterfeit products and rising manpower costs.

8.2 Burlington Coat Factory Investments Holdings, Inc. - Strengths

8.2.1 Strength - Multiple store brands

The sale of merchandise through multiple store brands increases the company’s market reach. Burlington Coat Factory

operates a wide network of apparel and home product retail stores in the US and Puerto Rico under Burlington Coat

Factory, MJM Designer Shoes, Super Baby Depot, Cohoes Fashions and Burlington Shoes banners. The company, under

its flagship banner Burlington Coat Factory offers a complete line of value-priced apparel, including: ladies sportswear,

menswear, family footwear, coats, baby furniture, accessories, home decor and gifts. Under the Cohoes Fashions banner

the company offers a selective designer series of ladies clothing, men and children’s garments, shoes and accessories while

offering a collection of moderately priced designer and fashion shoes through MJM Designer Shoes and Burlington Shoes

bannered stores. The company’s Super Baby Depot bannered stores offer a comprehensive range of apparel, furniture and

accessories for babies and toddlers. Such multi brand store operations allow the company to increase sector penetration

and market share.

8.2.2 Strength - Strong retail network

A robust retail network helps the company to reach a wide customer spectrum and increase its sales. As of February 2013,

the company operated a total network of 500 stores including 482 Burlington Coat Factory, 13 MJM Designer Shoes, two

Cohoes Fashions, two Super Baby Depot and one Burlington Shoes stores spread across 44 states of the US and Puerto

Rico. It also operates an internet store. Such a retail network helps the company to serve a large customer base satisfying

their needs.

8.2.3 Strength - Steady revenue growth

The company exhibited a steady revenue growth during the current fiscal year. It generated revenues of US$4,166 million

during FY2013, grew at a CAGR of 6.09% during 2011–13 with an annual growth of 7.15% over FY2012. This was

principally due to an increase in net sales of US$115 million and US$82 million related to 25 new stores opened and non

comparable stores. Furthermore, the increase in comparable store sales of US$45 million contributed to the rise in top line

performance. Steady revenue growth allows the company to pursue its growth plans and maintain its strong market position.

8.3 Burlington Coat Factory Investments Holdings, Inc. - Weaknesses

8.3.1 Weaknesses - High dependence on leased stores

Burlington Coat Factory is highly dependent on leased stores, which increases its operational cost in the form of rent and

decreases its profitability. The company’s inability to build its own stores has a significant impact on its operations.

Profitability may decrease if it is unable to renew the lease of store locations which are generating profitable business.

Moreover, finding a suitable location for its stores is also critical to its success. The company operates 92.00% of its stores

on lease. Most of these lease agreement are for five or 10 year terms. Furthermore, leases for a large number of store

locations will phase out in subsequent years.


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8.3.2 Weaknesses - Seasonality of business

The company’s business operations are seasonal, resulting in inconsistency in its revenues. It experienced fluctuations in

sales volume during the review year. Most of its products are gift items and therefore, generates higher sales and operating

income in the holiday months of November and December, the second quarter of the fiscal year. In addition, fluctuations in

sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments. However, the

company has recently achieved higher levels of growth in the non-holiday quarters, which indicates the company’s effort to

achieve revenue stability.

8.4 Burlington Coat Factory Investments Holdings, Inc. - Opportunities

8.4.1 Opportunities - Strategic growth initiatives

Strategic initiatives offer strong growth opportunity to the company while increasing our overall profitability. Burlington Coat

Factory has been growing organically by consistently opening new stores at regular intervals. During FY2013, the company

opened 25 new Burlington Coat Factory and further planned to open up to 28 stores by the end of February 2014. In

addition, the company instituted a Merchant Scorecard rating products across four key attributes— fashion, quality, brand

and price to help formalize a framework for buying decisions thereby increasing comparable store sales. Burlington Coat

Factory also started implementing e-commerce strategies to expand its online assortment and drive incremental traffic to its

stores. Such organic growth initiatives may strengthen the company’s position in the market providing it with enhanced

capacity to address the increasing demand.

8.4.2 Opportunities - Increase in consumer spending in the US

The company may be benefitted from the increase in consumer spending in the US. According to a recent report by the U.S.

Bureau of Economic Analysis (BEA), in December 2012, the personal income (PI) in the US increased by 2.60%, and

disposable personal income (DPI) increased by 2.70% as compared to November 2012. Additionally, personal consumption

expenditures (PCE) increased by 0.10% for the same period. PI, DPI and PCE have been consistently increasing every

month in the US since October 2012. For the entire 2012 period, personal income (PI) in the US increased by US$455 billion

or 3.52% and disposable personal income (DPI) increased by US$381 billion or 3.30% as compared to 2011. In addition,

personal consumption expenditures (PCE) increased by US$391 billion or 3.64% during the same period. The company

offers diverse portfolio of products under various brands, which enjoy wide reach through its massive presence in the US.

Growing personal income, disposable personal income and personal consumption expenditures indicates improved

consumer spending in the US, which may positively affect the purchases of products and performance of companies such

as Burlington Coat Factory.

8.4.3 Opportunities - Growth of web-based store concept

The company stands to benefit from growing trend of online retailing, which provides consumers the convenience of

shopping from home. With the increase in interactive methods and limitless content, the retail e-commerce is growing at a

faster rate. According to the Census Bureau of the Department of Commerce, during fourth quarter of 2012, e-commerce

sales in the US was US$60 billion, an increase of 4.40% in comparison with third quarter of 2012. The fourth quarter 2012 e-

commerce estimate increased 15.60% compared to fourth quarter of 2011. It was also reported that the estimate of the US

retail e-commerce sales for the fourth quarter of 2012 totaled US$72 billion, an increase of 36.30% compared to third

quarter of 2012. As Burlington Coat Factory also retails merchandise online besides operating retail stores, the company

may further enhance its online shops and benefit from the increasing estimates of web-based store concepts.


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8.5 Burlington Coat Factory Investments Holdings, Inc. - Threats

8.5.1 Threats - Rising manpower costs

Increasing manpower costs may have a negative effect on the company. The tight labor markets, government mandated

increases in minimum wages and a higher proportion of full-time employees are resulting in an increase in labor costs. The

federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). The minimum wage rate rates have

crossed or are nearer to US$8 per hour in several states such as Washington, California, District of Colombia, Oregon and

Massachusetts. Furthermore, the state minimum wages in Arizona, Colorado, Montana, Ohio, Oregon, Vermont and

Washington have increased between nine cents and 12 cents, in 2011. Also, eight states including Arizona, Colorado,

Florida, Montana, Ohio, Oregon, Vermont and Washington, increased the minimum wages by 28 to 37 cents, taking the

hourly wage between US$8 and US$9, effective from January 1, 2012. A significant proportion of workers in the retail sector

fall under the purview of minimum wages, any further rise in the wage rates may increase the operating costs of the

company that affect profits.

8.5.2 Threats - Increase in counterfeit products

The company’s business may be affected as a result of the huge influx of counterfeit products globally. High penetration of

counterfeit merchandise may lower the company’s sales and affect its profit margins. Moreover, as customers mistakenly

purchase counterfeit products bearing fake labels, the low quality of the products affects consumer confidence and also

damages the brand image of the genuine company. According to report published by International Chamber of Commerce

(ICC), the global economic and social impacts of counterfeiting and piracy is expected to reach US$2 trillion by 2015 and

places three million legitimate jobs at risk every year. International trade in fakes is expected to increase to US$960 billion

by 2015. Through low price offerings, the imitated goods are affecting the sales of the branded and genuine products.

Apparel and fashion accessories make up the largest share of counterfeit goods worldwide. As the company retails a wide

array of branded clothing and accessories, it is exposed to such challenges.

8.5.3 Threats - Changes in fashion trends

The company’s performance may be impacted by the frequent evolution in the fashion trends. The rate of change in fashion

trends has been increasing over the years, thereby forcing companies such as Burlington Coat Factory to constantly update

its product offerings with the latest market trends. To adopt the latest fashion trends, customers often shift their loyalties to

those brands that offer these trendy merchandises. Inability of the company to change or update its collection, according to

the fashion trends and varying customer preferences may negatively affect its brand image.


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Page 17

9 Burlington Coat Factory Investments Holdings, Inc. - Recent

Developments

Burlington Coat Factory December comparative store sales down

Burlington Coat Factory Investments Holdings, a retailer of apparel, has reported that comparative store sales decreased 4.2% for

December 2008, compared to December 2007.

Published Date : 1/15/2009 11:06:00 AM

Burlington Coat Factory Q2 net income down

Burlington Coat Factory Investments Holdings, a retailer of apparel, has reported a net income of $18.2 million for the second quarter

ended November 29, 2008, compared to $23.2 million for the same quarter ended December 1, 2007.


Burlington Coat Factory's annual net loss up

Burlington Coat Factory Investments Holdings, a retailer of branded apparel, has reported a net loss of $49 million for the f iscal 2008,

compared to $47.2 million for the fiscal 2007.

Published Date : 9/8/2008 2:36:00 PM

Burlington Coat Factory Q3 net sales down

Department store operator Burlington Coat Factory Investments Holdings has reported that net sales decreased $0.2 million to $987.1

million for the third quarter ended March 1, 2008, compared with the third quarter ended March 3, 2007. Comparative store sales

decreased 6%.


Burlington Coat Factory Q2 sales down

Department store operator Burlington Coat Factory Investments Holdings has reported that its net sales decreased $38.2 million to

$946.6 million for the second quarter of fiscal year 2008.


Source: Canadean


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Page 18

10 Appendix

10.1 Methodology

Canadean company reports are based on a core set of research techniques which ensure the best possible level of quality

and accuracy of data. The key sources used include:

Company Websites

Company Annual Reports

SEC Filings

Press Releases

Proprietary Databases

Notes

Financial information of the company is taken from the most recently published annual reports or SEC filings

The financial and operational data reported for the company is as per the industry defined standards

Revenue converted to US$ at average annual conversion rate as of fiscal year end

10.2 Disclaimer

All Rights Reserved

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, Canadean.

The data and analysis within this report is driven by Canadean from its own primary and secondary research of public and

proprietary sources and does not necessarily represent the views of the company profiled.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the

findings, conclusions and recommendations that Canadean 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 Canadean can

accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Reproduced with permission of the copyright owner. Further reproduction prohibited withoutpermission.

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Burlington Coat Factory Investments Holdings, Inc. Burlington Coat Factory Investments Holdings, Inc. SWOT Analysis Strengths Weaknesses Burlington Coat Factory Investments Holdings,