This Discount Retailer Is Finding New Locations Where Others Are Trying to Leave

When Burlington Stores (BURL) shops for new locations, it sometimes looks in places other companies couldn’t make work. 

The discount retailer formerly known as Burlington Coat Factory, which reported its latest quarterly results earlier today, said it expects to add more than 100 net new stores this year even after more than a dozen closings. And some of those new locations, executives said Tuesday, previously belonged to other retailers. 

Most new Burlington stores are—and are expected to be—leased after a comparatively typical search-and-lease process. “But in the past couple of years, we have been able to supplement our new store pipeline by selectively acquiring existing leases from retailers that are going through a bankruptcy process,” CEO Michael O’Sullivan said on a conference call, a transcript of which was made available by AlphaSense. “This approach has allowed us to move into centers that we might not have otherwise been able to access.

That process, O’Sullivan said, led Burlington to pick up more than 60 former Bed Bath & Beyond locations last year. “And this year, we have picked up or are working on a few dozen locations from other troubled retailers,” he said Tuesday.

Burlington said it expects to open 100 net new stores next year, and could open at least 500 net new stores by the end of 2028. 

Shares of Burlington were recently down about 2%, leaving them up more than 40% for the year so far. The company said third-quarter sales climbed 11% year-over-year on a 1% rise in same-store sales. It’s looking for fourth-quarter sales to rise 5% to 7%, with same-store sales flat to up 2%.