Raising Capital through IPO: Burlington Coat Factory's Success Story


Added on  2019-09-20

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Burlington coat factoryInitial Public Offering
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Company and its industryThe Burlington coat factory is an American national off-price retail department store. The company has five hundred and forty stores which are located in the forty-four states. Headquarterof the company is in Burlington town, New Jersey. The company provides clothes, furniture, home décor items and gifts. The company was incorporated in the year 1972. The total employees of the company are more than 28,000. It is the public company which lies in the retailindustry. The CEO and president of the company are Tom Kingsbury. The company receives $40Million from the New Jersey economic development authority as the incentive to shift outside the country. The company filed its S-1 registration on June 27, 2013, with the SEC for initial public offerings. The stock of the company was increased by 40% on the trading of the first day.The size of the average store of the company is nearly 80,000 square feet which are more than twice from the store size of the competitors. The company is offering a wide range of products inorder to get competitive advantage among the competitors within the same industry. The company is also providing tailored clothes in order to attract a large number of customers. The company is based on the belief that the off-price segment and wide variety of products enable to generate high revenue by attracting a large number of customers. Apart from forty-four states presence the company has a store in Puerto Rice. The company is a market leader in the retail segment of off-price (Johnston et al., 2014). Financial and non-financial factsAccording to the 10K form of SEC filings the revenue of the company increases in the year 201325.3% from the previous year 2012. The revenue of the company in the year 2012 was $4,165.5,
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Million. The net sales of the company are increased by $277.3 Million which is 7.2%. The net sales of the company mainly increased from opening new stores and the revenue from the previous stores was $197.0 Million (Year et al., 2014). The comparable sales of the stores were increased by 1.2%. The gross profit to the net sales was increased by 32.8% from 38.7% in the year 2012. The selling and administrative expense of the company increases from 31.5% to 31.9% in the year 2012. It includes the expense of opening a new store which is $67, Million. The company had $6.3 Million net loss in the year 2011 whereas the net income in 2012 was $25.3, Million. The following table shows the revenue and income rate of the company:Particular200820092010201120122013Revenue$3424$3571.4$2479.3$3701$3887.5$4165.5Net income-49%-191.6%18.7%31.0%-6.3%25.3%The revenue of the company increases in the year 2012, but the company has a net loss of 6.3%. It shows that the company is struggling for business expansion. Moreover, the company is still profitable. The company has opened its new store which shows that the company is expanding inorder to gain high profit in the long run.Another financial fact of the company includes that the company has no long-term liability. The total assets of the company in 2013 were $2741, 912 and total liability and stockholders' equity of the company was $1741, 912. Since initial public offerings, the company has raised its debt, so the company needs not to pay interest expense. The reduction in the interest rate helps to increase the value of the company. The company has successfully implemented the strategic initiatives of the company which helps to improve the performance of the company. The financial status of the company is the string which is shown from the SEC filings form 10-k. The
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reports reflect that the prices are stable since 1996. The prices are increasing in the year 2006, but it dropped in the year 2008-09 because of global financial crisis in the global market. The prices of the company are decreased at the time of recession (Boyle et al., 2012). The revenue of the company is thriving which is shown from the financials of the company.
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