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Burlington Coat Factory Wants You to Focus on Everything But Coat Sales

Bloomberg
By: Kim Bhasin

Unusually warm weather continues to cause problems for clothing stores.

Burlington Stores, the parent company of Burlington Coat Factory, on Tuesday said comparable-store sales were expected to be up 4 percent in the fourth quarter—but only if you don’t count the coats. Yes, warm-weather woes are real this winter. A company with the word “coat” in its name has resorted to quoting a sales figure that excludes cold-weather items.

“While we are pleased with the strong response to our gift assortments, especially in fragrances, bath and body, and home, these increases have been offset by headwinds affecting our cold-weather assortments,” said Burlington Stores Chief Executive Officer Tom Kingsbury.

The warm winter has wreaked havoc on clothing sellers unable to get rid of the jackets, sweaters, gloves, hats, and boots languishing on store racks and shelves. Businesses in the U.S. stand to lose about $572 million because of the oddly warm conditions, according to weather intelligence firm Planalytics. Outerwear, such as coats and parkas, was particularly hard-hit, with demand dipping 10 percent in December.

“It’s not that it was so warm, it was that it was so warm for so long,” said Scott Bernhardt, president of Planalytics. The eastern two-thirds of the U.S. experienced about eight weeks of unseasonably warm weather. “None of this should have been a surprise, but a lot of retailers were still caught out by it.”

Retailers were already panicking in November, when sales for puffy coats and other winter wear usually pick up steam. “Anything related to cold-weather product was an issue,” Dick’s Sporting Goods CEO Edward Stack said at the time. H&M blamed its sales miss on winter woes, too. Uniqlo is putting its spring items into stores earlier than usual and releasing fewer “weather-sensitive” items. And Macy’s CEO Terry Lundgren revealed earlier this month exactly how much the warmth was hamstringing his department store: “About 80 percent of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods,” he said.

Even when retailers managed to get shoppers into stores, the cold-weather items they bought were heavily discounted, cutting into store margins. Columbia is marking its coats down as much as 50 percent. Burlington and Gap are offering up to 75 percent off. Winter parkas on sale at H&M are selling for as little as $30.

Although temperatures are finally dipping in mid-January, it won’t turn things around for winter gear—even if the nation freezes over in February. Retailers are already clearing out their seasonal goods in preparation for spring, and there’s too much ground to make up.

“It’s too little, too late,” said Bernhardt.

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