Business model of Burlington Stores

Customer Segments

Burlington operates as a brick and mortar and online retailer of clothes, accessories, and footwear.

  Its customers comprise members of the general consumer population. 

The Company principally targets customers in the following groups:

• Middle Class Consumers, comprising consumers from middle income families with a reasonable amount of disposable income to spend on fashion items;
• Value-Conscious Consumers, comprising customers who are eager to find the best value for their money and who appreciate deals and discounts on quality items; and
• Younger Consumers, comprising consumers under the age of 50, with customers aged between 18 and 30 notably a growing demographic for the Company’s stores.

Burlington is headquartered in the US, which is the Company’s sole market.  The Company serves US customers across 45 states, as well as in Puerto Rico.  The Company does not appear to have any international operations.

Value Propositions

Burlington provides value to its customers in the following ways:

• Reputation and Standing – Burlington is a well-known brand name in the US outlet retail market, with an established reputation as a reliable and provider of branded apparel and related items at reasonable prices;
• Value and Affordability – Burlington has built its reputation and successful business model on being able to provide items to customers at discounted prices, offering better value for money that competing retail chains;
• Accessibility and Reach – Burlington operates a broad network of outlet stores numbering more than 670 across 45 US states and Puerto Rico, as well as an online store;
• Product Range – Burlington offers its customers a wide range of apparel for men, women, and children, as well as a selection of accessories, footwear products, and toys, ensuring that it is able to serve. Broad customer base; and
• Customer Service – Burlington offers customers high quality customer service both before and after sale, with the Company operating a dedicated customer care organisation that handles complaints and queries.

Channels

Burlington serves its customers primarily via its network of physical retail outlets.  The Company operates a network of more than 670 stores across the US and Puerto Rico, each of which is staffed by dedicated sales personnel who deal directly with customers. 

The Company also operates an online sales channel, through which customers are able to browse products, make purchases, and schedule deliveries on a self-service basis. 

Burlington’s sales operations are supported by its distribution and logistics infrastructure.  The Company operates four distribution centres across the US that ship around 98% of the Company’s merchandise. 

The remaining 2% of merchandise units are drop shipped by its vendors directly to stores. 

In addition to the distribution centres the Company operates, Burlington has arrangements with third parties for the use of pool point facilities.

Customer Relationships

Burlington primarily serves its customers directly. 

The Company’s in-store sales personnel interact personally with customers to assist in their shopping experience, responding to queries, handling complaints, and providing guidance.

Burlington operates an online store at www.burlington.com, through which customers can browse products, make purchases, and arrange deliveries on a self-service basis. 

The Company also offers a membership service which can be accessed online and enables customers to access members-only benefits and deals. 

Burlington operates a dedicated customer support team, which operates out of the Company’s offices and provides personalised support to customers over the phone and online. 

The Company is also able to communicate directly with customers through its various social media accounts, including with  Facebook, Twitter, Instagram, Pinterest, and YouTube.

Key Activities

Burlington operates as a retailer of branded apparel.  The Company operates a network of more than 670 outlet stores across 45 US states and Puerto Rico. 

Burlington organises its product portfolio into a number of categories, including coats, women, men, juniors, girls, boys, shoes, handbags and accessories, beauty and fragrance, home and toys. 

The Company arranges its sales across the following segments: Women’s ready-to-wear apparel,  Accessories and footwear, Menswear, Youth apparel and baby, Home, and Coats. 

In addition to its brick and mortar outlets, Burlington operates an online sales channel through which customers can browse products and make purchases on a self-service basis.

Key Partners

Burlington works closely with a network of partner companies and organisations across the US. 

These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, including brands and manufacturers that provide products for sale across the Company’s network of outlets, as well as providers of third party services that support the Company’s operations across the enterprise; 
• Distribution and Delivery Partners, including specialist logistics, distribution, and courier companies that support the Company’s distribution and storage activities, as well as its delivery operations for online orders;
• Social and Community Partners, including a range of non-profits and charitable organisations with which the Company collaborates on social and community projects across the US;
• Marketing Partners, including a range of brands and organisations with which the Company embarks on marketing, branding, and advertising partnerships in order to further the reach of its brand; and
• Strategic Partners, including various other companies and organisations with which the Company collaborates on business development projects.

Burlington has a number of key partnerships in place.  This includes charitable partnerships with The Leukemia and Lymphoma Society, Good Morning America, and Delivering Good Inc, as well as a retail partnership with OwnerIQ.

Key Resources

Burlington’s business model depends on its ability to offer a wide range of high quality products to customers at affordable prices. 

As such, the Company’s key resources are its intellectual properties, its product catalogues, its suppliers and supply chain, its network of outlet stores, its distribution and storage network, its network of partners, its online store and IT infrastructure, and its personnel. 

Burlington notably owns and or leases more than 670 outlet stores across the US, which are key to its activities.  It also operates several distribution and warehousing facilities that support its core retail operations.

Cost Structure

Burlington incurs costs in relation to the acquisition of products and merchandise, the procurement of third party services, the operation of its network of outlets – including utility and occupancy costs, the management of its distribution and logistics infrastructure, the development and maintenance of its online store and IT infrastructure, the implementation of marketing and advertising campaigns, the payment of salaries and benefits to its personnel, and the management of its partnerships.

For 2018, Burlington recorded total annual cost of sales in the amount of USD 3.87 billion, as well as selling, general, and administrative costs in the amount of USD 2.02 billion, comprising USD 1.34 billion in store related costs, USD 313.3 million in product sourcing costs, USD 200.9 million in corporate costs, and USD 89.5 million in marketing and strategy costs.

Revenue Streams

Burlington generates revenue through the operation of a network of outlet stores across the US.

  The Company derives its revenue in the form of sales fees collected from customers at point of sale, including across its brick and mortar stores and its online sales portal.    

In 2018, Burlington generated annual revenue totaling USD 6.67 billion, up on the USD 6.11 billion recorded by the Company in 2017.