PA1Fa20Assignment11 xBurglingtonSWOT
Research a company
Professional Application #
1
Company Overview
In this project you will gather information about a U.S. public company that has operations in your local area. Financial information about a company is useful when one understands a company’s lines of business and strategies for achieving success. So this first project asks you to select a company and gather information about its strengths, weaknesses, opportunities and threats. The next project will have you complete financial analysis and match your analysis to the qualitative information you have about this company, so remember that this project is asking you to understand how this company makes money and next you will analyze the financial statements.
Step 1: Select a U.S. public company with operations in your local area.
Your instructor has screened a set of retail companies that fit the following criteria:
· A US public company
· Positive income for the last three years
· Positive total stockholders’ equity for the last three years
· Operations in Kansas – and nationwide in many areas.
You may select a company from the instructor-provided list or get approval from your instructor to study another company that also fits these criteria.
Step 2: Research the company.
Read about your company from at least two sources:
1. You must obtain the SWOT Analysis from Marketline for your company, available in the database Business Source Complete at the Mabee Library website. Go to
https://washburn.edu/mabee/
. See the handout on locating company information for assistance in locating this resource.
NOTE: Do not google SWOT for your company and use whatever you find. Use Business Source Complete which is a professional business resource, so that you will be familiar with it for your future business classes and other research that you do.
2. Obtain one other source:
a. the Management Discussion and Analysis in the most recent 10-K SEC filing
b. an analysis from another subscription investment source, such as Morningstar or ValueLine available through Topeka & Shawnee County Public Library
c. an analysis from a high-quality internet investing website such as Motley Fool or Seeking Alpha
See the separate handout on Finding Company Information to help you with this step.
Step 3: Visit the store — or browse its website
From your reading in Step 2, identify the observable features of the business that you can check out from visiting the location in person or on the Internet. Do you see evidence of the strengths and weaknesses, opportunities and threats that the “experts” discussed? How do your observations fit with the company analyses? Can you reconcile any differences between what you see and what was described about the company? You must explicitly include information from your visit or virtual visit in your report.
Step 4: Gather information through an interview, webcast, or podcast. Choose one of the alternatives below:
A) Interview:
Because face-to-face interviews may be difficult to arrange, alternatives can be arranged. If you have a relationship with an employee at your company, you can still do an interview, but otherwise move on to alternatives (B) or (C). If you have a contact, ask this person about their perspective on their company and the Topeka location. What is the employee’s perspective on the strengths and opportunities of the business? It is more difficult to ask about weaknesses and threats, but you can ask about the “challenges” present for the business. If you explain, “I am working on a project for my college accounting class about [your company], and I need to add the perspective of a local manager to my other research. Can you help me?”, most people will want to be helpful. If no employee is able to participate, select another alternative.
B) Company quarterly earnings webcast.
Many companies allow investors into meetings in which the company announces its quarterly or annual earnings by allowing the public to listen live at the time and then to listen later as a webcast. To see if your company has a quarterly earnings webcast, go to the link for Investor Relations or Investor Information or About Us or something similar from the company homepage, typically at the bottom of the webpage. Look for a link to Quarterly Earnings Announcements or Quarterly Results or something similar. You want to LISTEN rather than READ. Choose the most recent webcast. Not all companies will have a quarterly webcast posted, so you may need to select another alternative.
C) Retail outlook webcast
Only if you can’t get information on your specific company should you pursue one of the following webcasts that provide an overall look at the retail industry. Listen to one webcast and incorporate this information as it pertains to understanding the strengths and weaknesses of your company.
Retail Leader webcasts from EnsembleIQ, Chicago, IL, a business-to-business information and media company. Look through the videos at
https://retailleader.com/videos
for someone else’s interview with your company – WalMart, Walgreens and others are here. Or look for a general retail video that provide you with information about current retail challenges such as What Retailers and Brands Need to Know about AI or Retail Experience Begins with the Network.
Step 5: Write a report that will put together your sources of information about the company to communicate your insight into the strengths, weaknesses, opportunities and threats for your company’s operations. Remember that you can support your discussion with quotes from your sources, but any quotes must be documented with inline references and a reference list. See the separate handout on References.
Grading
Points |
Criteria |
||
20 |
Demonstrates an understanding of the lines of business of the company and how it makes money |
||
40 |
Identifies strengths, weaknesses, opportunities, and threats |
||
Research plan of the MarketLine SWOT report, another published sources, a site visit, and an interview or webcast completed and documented. |
|||
Uses standard English construction and logical organization to clearly present ideas |
1
Burlington Coat Factory Warehouse
Corporation
Company Profile
Publication Date: 27 Dec 2010
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Burlington Coat Factory Warehouse Corporation Page 2
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Burlington Coat Factory Warehouse
Corporation
TABLE OF CONTENTS
Company Overview………………………………………………………………………………….4
Key Facts…………………………………………………………………………………………………4
SWOT Analysis………………………………………………………………………………………..5
Burlington Coat Factory Warehouse Corporation Page 3
© Datamonitor
Burlington Coat Factory Warehouse
Corporation
TABLE OF CONTENTS
COMPANY OVERVIEW
Burlington Coat Factory Warehouse Corporation (Burlington or ‘the company’) is a privately held
apparel and merchandise retailer. Burlington operates a chain of about 459 stores in 44 states of
the US and in Puerto Rico. The company is headquartered in Burlington, New Jersey.
The company has not released its annual report. Therefore financial details are not available.
KEY FACTS
Burlington Coat Factory Warehouse CorporationHead Office
1830 Route 130
Burlington
New Jersey 08016
USA
1 609 387 7800Phone
1 609 387 7071Fax
http://www.burlingtoncoatfactory.com/Web Address
Burlington Coat Factory Warehouse Corporation Page 4
© Datamonitor
Burlington Coat Factory Warehouse
Corporation
Company Overview
SWOT ANALYSIS
Burlington Coat Factory Warehouse Corporation (Burlington or ‘the company’) is an apparel and
merchandise retailer, operating a chain of about 459 stores in the US. Burlington’s wide network of
stores enhances its market penetration opportunities and increases its bargaining power with
suppliers. However, if the US economy continues to recede, it would further impact the consumer’s
discretionary spending capacity and in turn reduce the demand especially for Burlington’s high priced
designer label products.
Weaknesses
Strengths
High level of indebtedness
Strong retail network in the US
Weak profitability
Diversified product portfolio
Threats
Opportunities
Weak economic situation in the US can put
pressure on the company’s top line growth
Growing online retail spend to strengthen
the company’s sales and market reach
Rising labor wages in the US could
adversely affect the company’s margins
Capital investment for new stores
Strengths
Strong retail network in the US
Burlington has a strong network of retail stores in the US. As of October 2010, Burlington operated
459 stores in 44 states. The company operates its stores under the brand names like Burlington
Coat Factory Warehouse stores, MJM Designer Shoes, Cohoes Fashions and Super Baby Depot.
The company also sells products online on its website, burlingtoncoatfactory.com. Burlington’s wide
retail network enhances its market penetration opportunities and increases its bargaining power with
suppliers.
Diversified product portfolio
The company offers an extensive selection of designer and fashion products for the brand-conscious
consumer, such as footwear and merchandise at its MJM Designer Shoe and Cohoes Fashion,
respectively. Burlington also caters to the price-conscious consumer by offering low-priced quality
products such as apparel and accessories for men and women of all ages as well as home decor
and furniture at its Burlington Coat Factory Warehouse stores.
Burlington Coat Factory Warehouse Corporation Page 5
© Datamonitor
Burlington Coat Factory Warehouse
Corporation
SWOT Analysis
In addition, the company operates a Baby Depot department store that is focused on branded apparel
and merchandise for infants and toddlers. A diversified product portfolio allows Burlington to cater
to a wide spectrum of consumers, thus differentiating itself from its competitors.
Weaknesses
High level of indebtedness
Burlington’s high level of debts could adversely affect its financial condition and future operations.
As of October 30, 2010, the company’s total indebtedness was $1.2 billion. As a result of its
indebtedness, Burlington would be required to use a portion of its cash flow from operations for its
debt service payments payable for the next financial year. In addition, Burlington’s outstanding
indebtedness could increase the impact of negative changes in general economic and industry
conditions, as well as competitive pressures. Finally, Burlington may be unable to obtain additional
financing for working capital or capital expenditures under the current credit crunch situation.
Weak profitability
Burlington has been recording weak profitability over the past few years. The company generated
a net loss of $38 million for the nine months ended in October 2010, mostly attributable to interest
expense that the company incurred. Similarly for the nine months ended in October 2009, the
company recorded a net loss of $41.9 million. If Burlington were to continue to suffer losses, it would
decline the company’s market share.
Opportunities
Growing online retail spend to strengthen the company’s sales and market reach
The online retail market in the US is growing at a rapid pace. According to the industry watchers,
the US online retail sales will reach $229 billion in 2013. The market will grow at a Compound Annual
Growth Rate (CAGR0 of 10% for the period spanning from 2008 to 2013.
Burlington has a significant presence in e-commerce. In addition to physical store operations,
Burlington offers coats, baby apparel and accessories, maternity fashion apparel and furniture online
on its website, burlingtoncoatfactory.com. Thus, the growing online retail spending will enable
Burlington to earn more revenues from its online websites. A positive outlook for the online retail
market will boost the company’s revenues and further enhance its market reach.
Capital investment for new stores
Burlington Coat Factory Warehouse Corporation Page 6
© Datamonitor
Burlington Coat Factory Warehouse
Corporation
SWOT Analysis
As part of its expansion efforts in November 2010, the company opened 20 seasonal pop-up coat
stores across the country. The stores are opened under the name Burlington Coat Factory Select.
The opening of these stores have been well planned with the holiday season. The product offerings
at these stores include men’s and women’s coats, hats, gloves and scarves. The Burlington Coat
Factory Select stores range from 5,200 to 10,000 square feet in retail space and are located in major
malls across the country. Thus a wide product offering combined with proximity to customers is
expected to significantly boost the company’s revenue.
Threats
Weak economic situation in the US can put pressure on the company’s top line growth
Burlington primarily operates in the US. Therefore, any economic turbulence in its key market can
adversely affect its revenue and profitability. Due to the economic crisis, the level of economic
activities has slowed down in the US market. The unemployment rate in the US has also been moving
in the range of 9.5% to 9.8% throughout 2010. In November 2010, it was reported to be as high as
9.8%. Higher the unemployment rate, lower will be the consumption expenditure as the disposable
income in the hands of customers will be less.
The economic downturn has also led to a severe decline in consumer confidence, which measures
the level of optimism that consumers have about the performance of the economy. The consumer
confidence in the US improved marginally to 54.1 in November 2010 from 49.9 in October 2010.
However, it is still low as compared to 87.3 in January 2008.
Thus, weak employment situation combined with low consumer confidence can lead to low level of
consumption expenditure in the US. This can reduce the demand for the company’s offerings.
Therefore a weak economic outlook for the US can put pressure on the company’s top-line growth.
Rising labor wages in the US could adversely affect the company’s margins
Labor costs have significantly increased in the US. In recent times, tight labor markets, increased
overtime, government mandated increases in minimum wages and a higher proportion of full-time
employees have resulted in an increase in labor costs, which could materially impact the group’s
cost of operation. The federal minimum wage rate in the US was increased to $6.55 an hour effective
in July 2008 and further from July 2009 it was increased to $7.25 an hour. As most of the company’s
operations are located in the US, increased labor costs in the region would increase its overall cost
structure and can adversely affect the company’s profit margin.
Burlington Coat Factory Warehouse Corporation Page 7
© Datamonitor
Burlington Coat Factory Warehouse
Corporation
SWOT Analysis
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