Burlington plans to open Santa Rosa discount clothing store this spring
Burlington Stores (NYSE: BURL) plans to open a 31,000-square-foot Santa Rosa store this spring, part of a nationwide expansion of smaller locations.
The New Jersey-based discount clothing retailer sees this as supportable especially because of inflationary pressure on household budgets. Burlington focuses on in-season, fashion-focused merchandise, intended to be significantly below other retailers' prices. Products include women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats.
The coming Santa Rosa location will be in a shuttered Office Depot site at 1960 Santa Rosa Ave. in the Santa Rosa Marketplace power center. It would be Burlington’s third in the North Bay and 94th in California, a company spokesperson confirmed. Burlington also has stores in Rohnert Park and Vacaville.
CEO Michael O’Sullivan said on a March 3 financial-results conference call that the higher-inflation environment could be a risk to the company as lower-income consumers are stressed to pay for more-expensive food, gas and other essentials. But it also could be a “big opportunity” for Burlington, as off-price retail historically has done well in such an economic environment as consumers trade down.
“Usually in times of economic stress when consumers are under pressure, their natural and rational reaction is to focus even more heavily on finding great value,” O’Sullivan said, according to a transcript by Seeking Alpha.
He also said the trend among other clothing retailers to raise prices as their costs increase could create a “value gap” that will benefit Burlington.
The Santa Rosa store is in the 30,000-square-feet-or-smaller range that Burlington has been focusing on as a prototype for new stores. O’Sullivan said on the call that these small-format locations will make up three-quarters of store openings in the next five years.
One reason for this focus, he said, is the company is expecting the locations to have “higher sales productivity” than the chain’s big boxes, producing gross sales of over $300 a square foot, or $400 per sales floor square foot. That’s on top of lower occupancy and operating expenses for the smaller footprint.
A year ago, Burlington said it planned to expand to 2,000 stores over five years. Last fiscal year, ended Jan. 29, it opened 101 stores, relocated 17 and closed five, ending with 840 locations in 45 states and Puerto Rico, for a net gain of 79 sites.
Of the new locations, 48 were the smaller format, O’Sullivan said.
This year, Burlington plans $725 million in capital expenditures, double that of last year, opening 120 stores, with a net gain of 90 locations.
Burlington ended fiscal 2021 with $9.32 billion in sales, up 28% from $7.29 billion pre-pandemic. Earnings were $408.8 million, up from a loss of $216.5 million last year but down from earnings of $465.1 million in fiscal 2019.
Burlington was advertising for seven hires at the forthcoming Santa Rosa store on Friday.
Tom Laugero of Keegan & Coppin Co. Inc. represented Santa Rosa Marketplace owner Donahue Schriber in the lease, signed last July. KDC Construction of Orange, California, was the tenant-improvement general contractor.
Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at email@example.com or 707-521-4256.