Burlington Stores Inc. is seizing the moment.
Capitalizing on the inflationary economy, shopper demands for greater value and the real estate made available by bankruptcies, Burlington has been generating healthy sales gains about two years and is expanding at an accelerated rate. This year, the plan is to launch a record 110 new stores. A 2-million-square-foot distribution center in Savannah, Ga., is due to open soon.
By the end of 2026, Burlington will operate approximately 1,320 units.
But on Friday, the retailer will cut the ribbon on something special — one of its highest-profile and largest units, an 80,000-square-foot, two-level store at 620 Sixth Avenue inside the historic Beaux-Art style Siegel-Cooper building also housing TJMaxx and Marshalls. The site, located between 18th and 19th streets, already has some retail history as Siegel-Cooper, in 1897, opened what was then the largest department store in the world there.
More recently, the space was occupied by Bed, Bath & Beyond. Situated in the heart of Manhattan’s bustling Chelsea neighborhood, the store has now been redesigned again with Burlington’s “reimagined” format featuring wider aisles, enhanced signage and a layout intended to make it easier for shoppers to find what they want while also cutting down on merchandise clutter.
“We expect Chelsea to be among our top-volume stores,” said Burlington’s chief executive officer, Michael O’Sullivan, in an exclusive interview. “There’s a lot of buzz about Chelsea. It’s a very visible new store for us, and a relocation from a store that was just a few blocks away.”
Nationwide, he said Burlington would “probably grow by about 10 percent in sales volume” this year.
“A big chunk of that is our new store program, and there’s also some comp store growth there too,” O’Sullivan said. “We expect all of our new stores to be fairly productive and profitable their first year.
“I hate to take advantage of other people’s misfortunes, with all the retail bankruptcies that have happened, but over the last few years, we’ve picked up dozens and dozens of great store locations, from Bed, Bath & Beyond, Big Lots, and most recently, Jo-Ann Fabrics. A lot of retailers have gone out of business over the last few years, not because they had bad real estate, but because they had other some other business problem. In fact, their real estate was very good.”
Burlington entered this year with momentum, coming off a strong 2025 when total sales increased 9 percent to $11.55 billion, comparable sales rose 2 percent, and net income advanced 21 percent to $610.15 million. For the fourth quarter, total sales increased 11 percent to $3.64 billion, while comparable store sales were up 4 percent.
The off-pricer’s stores offer an extensive selection of in-season, branded merchandise at up to 60 percent off, including women’s and men’s apparel in regular and special sizes, youth apparel, baby products, beauty, footwear, accessories, home, toys, gifts and cosmetics. In its “treasure hunt” for bargains, you can find styles from Tommy Hilfiger, Gloria Vanderbilt, Adidas, Kenneth Cole, DKNY, Juicy Couture, and Karl Lagerfeld, among other well-known brands. The Chelsea site will bring in fresh merchandise weekly.
O’Sullivan, Burlington’s CEO since September 2019, has been modernizing the off-pricer and elevating its financial performance. Prior to joining Burlington, he spent 16 years at Ross Stores, the nation’s second-largest retailer, ultimately rising to president and chief operating officer in 2009. Before Ross, O’Sullivan was a partner at Bain & Co.
In the following Q&A, O’Sullivan discusses Burlington’s transformation, expansion strategy and what’s special about the Chelsea opening.
Michael O’Sullivan
WWD: At 620 Sixth Avenue, there’s also a TJMaxx and Marshalls. Do you like to situate Burlington near your competitors?
Michael O’Sullivan: It varies depending upon the specific location and the specific market, but in general, we like to be co-located with other off-price retailers. We’ve been growing not at the expense of each other. Off-price, as a retail segment, has been taking share from non-off-price. We’ve grown by taking share from traditional department stores, specialty retailers, mall-based retailers. If we have the opportunity to move next door to our off-price peers, we actually think, there’s a traffic opportunity because there’s already an off-price customer coming there and we can take advantage of that, and hopefully draw incremental traffic to the building. So in the 25 years, I’ve been working in the off-price I’ve learned that in general, it’s helpful for us to be co-located with our off-price peers.
WWD: What kind of real estate do you prefer for your stores?
M.O.: New York City is its own thing, but once outside the city, our preference is to be in a strip center, preferably with a discount grocery tenant or with other off-price retail. We prefer an established center where there’s already a lot of traffic. Also, demographics play a role.
WWD: So, in terms of the demographics as well as merchandise, how does Burlington differentiate from Ross Stores, TJMaxx and Marshalls?
M.O.: If I were to look at the differences between us and our non-off-price and our off-price competitors, we tend to skew low-to-moderate income households, more urban, definitely more ethnic, larger families. Our assortment correlates with that. And we tend to have a younger customer, so our kids business is much more penetrated. Our juniors business and our young men’s business are also much more penetrated than our off-price peers. Our customers tend to be renters rather than homeowners. So our home business tends to look a lot different. Our beauty business tends to look different too. It’s more ethnic, maybe more fashion-oriented. Our customer tends to be more fashion-forward and our assortment tends to be more fashion-forward. Now there are also a few historical differences. Like outerwear is the most obvious one. We have a much stronger outerwear business than our competitors.
WWD: What’s your outlook for 2026?
M.O.: The high end of our guidance is like $12.5 billion or so in sales. But we’re feeling pretty bullish about 2026. I wouldn’t be surprised if we got close to $13 billion.
WWD: There’s been some buzz about a potential recession. Are you concerned?
M.O.: Our proposition at Burlington is that we’re offering the same item, the same brand, the same quality, same fashion as other retailers, but we’re offering those same items at up to 60 percent off their retail price. So our proposition is all about great value. In an economic downturn, that proposition resonates even more than it normally resonates. After the financial crisis in 2008, off-price retailers really benefited. So I don’t look at an economic downturn in 2026 with dread. I actually feel it could be good for us. We’ll have to navigate it, but off-price tends to do well in an economic downturn.
WWD: Will rising gas prices hurt the business?
M.O.: We’ve gone back over time with a regression analysis of gas prices versus our comp store sales growth. There’s no correlation. That doesn’t mean that higher gas prices are good for us. They’re probably not. If the customer has to spend more on gas, they’re going to spend less on other things. But gas prices are one of many things that can affect our business, and they kind of get lost in the noise. If the weather is favorable, if tax refunds are favorable, that could easily offset higher gas prices.
WWD: Explain how you have been evolving the business.
M.O.: There’s no other retailer that’s evolved as much as Burlington. We were originally the “Coat Factory” with big stores full of outerwear. Over time, we broadened into more of a discount department store, until 10 to 15 years ago when we started to evolve into more of an off-price retailer, similar to some of [our] off-price peers. Over the last few years, we’ve accelerated that to have a much stronger focus on value, and by making the stores more exciting, with a greater focus on really recognizable brands in our assortment. And pivoting to elevating the assortment has really driven our sales over the last couple of years — double-digit growth.
A few years ago, we launched an initiative at Burlington to completely reimagine and redesign the store, changing the layout, the graphics, the lighting, the fixtures, to create an environment where the customer feels [attracted] to the treasure hunt, and invited to explore. It’s better organized, more fun to shop. We started to roll that out to new stores a couple of years ago. Then last year, we began retrofitting existing stores. We’re midway through that retrofit. Chelsea has all of those themes. But because it’s such an iconic location, we added some customized themes in terms of the graphics. They’re reminiscent of Broadway.
WWD: What will we see in the Chelsea store?
M.O.: Chelsea really epitomizes how Burlington has evolved. From the moment you walk in, you’ll see that big presentation of really recognizable brands, especially in our missy apparel business. You’ll also see a very strong representation of recognizable and high-end brands in accessories like handbags, and in jewelry. That’s what you’ll see at the front of the store. As you work your way to the back of the store, you’ll see a great presentation of the kids business, and you’ll also see a wide assortment of home merchandise…The assortment is much more elevated than maybe consumers believe Burlington has. Burlington has huge brand awareness. Everybody has heard of Burlington, the Coat Factory. But the trouble is many of these consumer perceptions are out of date. Maybe they bought a winter coat with their mother 20 years ago and haven’t been to a Burlington store since. Our customer research tells us when they walk into Burlington after not shopping Burlington for awhile, they’re really shocked at the breadth of the assortment and the elevation of brands. There’s also a store environment [rolling out] that’s very different from legacy Burlington. Those big, hulking stores with a sea of racks of stuff, that’s not who we are anymore.
WWD: How does the Chelsea unit compare in size to the average Burlington unit?
M.O.: We still have a legacy of many older stores that are much bigger than 25,000 square feet. But in the last five years, most of our new stores have been in that 25,000-square-foot range. New York City, of course, follows its own rules. When we open stores in Manhattan or in the Bronx or in the other boroughs, those stores tend to be very high volume, and therefore it’s appropriate for us to have more than 25,000 square feet. Legacy stores, I’m working on those that are 80,000, 90,000 square feet. We don’t need [so much] space. We have programs to reduce those stores or relocate them.
WWD: What are some key brands sold at Burlington?
M.O.: Our agreement with vendors is we won’t publicly mention brands…One thing driving our growth over the last few years is how we have ramped up the mix of great, recognizable brands. We’ve built really strong vendor relationships. I don’t think it’s well understood that vendors doing business with Burlington are not in any way undermining their full-price business. Our core customer is low- to moderate-income. They aren’t shopping full-price retail. They can’t afford it. If they are shopping department stores, they’re buying brands on promotion or private label, otherwise, they’re shopping discount retail. Burlington represents incremental sales volume for brands.
WWD: How do you procure brand merchandise?
M.O.: That’s an important question, because it’s a mix depending on the brand and the category. We love closeouts and overruns. We’re also very interested in orders canceled by other retailers. A department store might order merchandise from a vendor but by the time the goods get there, the sales trend might have softened, or the weather might not be good, and they canceled the order. We step in and we buy that order. We also like to buy directly from vendor inventories, if there’s an excess in their warehouses in the United States. We also buy upfront merchandise. That tends to be more strategic for us. We’ll do it in areas where we feel it’s important to have this brand presentation and the only way we can get it is by buying upfront merchandise where we’re ordering merchandise to be made for us.
WWD: Doesn’t an off-pricer typically operate on narrow margins?
M.O.: We don’t need every item to pay for itself. We don’t need the margin to work on every item. We just need the margin to work overall, across the whole assortment. There are some areas where we might be prepared to run a thinner margin on certain brands. But over in other areas, we’re going to make [greater] margins, so averaging it out, we end up making money.
It’s important to understand that this is a relationship business. We know our vendors need to make money too, and that they also have business objectives. We’re in this for the long haul. We can only win if our vendors win, and that’s the approach we’ve taken to building vendor relationships, and that’s why we’ve been successful in getting access to more and more brands over the last few years.
WWD: What is your price range?
M.O.: Our merchants are trying to build that good, better, best assortment. In our kids business, the price points might be lower. In accessories, like handbags, the price points would be higher. Our average retail price is in the $10 to $15 range. But you’ll find items that go up to $100 or more.
A better organized Burlington store.
WWD: Are you planning to introduce more categories to the mix?
M.O.: We’re expanding categories all the time. Off-price really started as an apparel business and grew into footwear, because that’s an adjacency. Then it grew into accessories, and then home. That evolution is still happening. Also, the definition of home has expanded. You’ll find pet merchandise in our store. You’ll find sporting goods, outdoor furniture and floral arrangements, especially around Easter. There has to be a supply base we can feed off, where we can offer great value to the customer, and all of those categories I just mentioned offer that kind of supply base.
The beauty business has been a big growth category for us and our off-price peers as well. We always had an activewear business that was very small, pre-pandemic, and then it just ballooned during the pandemic. There’s an aisle at Burlington selling arts and crafts. We see an opportunity there because a retailer [Jo-Ann] has gone out of business. I don’t know whether some of those businesses will take off and become big for us or not, but there are lots of experiments happening across the store.
WWD: Any thoughts of launching e-commerce?
M.O.: Our strong view is that e-commerce doesn’t work in off-price. And it’s not like people haven’t tried. You know, over the last 25, 30 years, I’ve seen a number of examples of people who’ve launched e-commerce, businesses targeting off-price and it just hasn’t gone anywhere. There are multiple reasons why it hasn’t gone anywhere. Part of it is economic, that we’re largely in an apparel, accessories and footwear business. So you should expect if you’re selling apparel, accessories and footwear online, you’re going to incur pretty significant return costs and shipping costs. If you’re selling at a very high price point, if you’re selling a $500 sweater, you can absorb those return costs and those shipping costs. If you have an average unit retail of $10 to $15, you can’t absorb those return [costs]. We’re a treasure hunt environment, so we have a lot of breadth in the store, not much depth. Very hard for an e-commerce retailer to support that. And then also, the vendors want to be very careful about how their brands are displayed.
Signage at the new Burlington store opening at 620 Sixth Avenue in Manhattan on Friday.
