Burlington Stores gets out of the e-commerce game

US off-price retailer Burlington Stores is to pull its e-commerce operations, which account for about 0.5% of total sales, and focus on growing its bricks and mortar business.

The company currently operates 720 stores in 45 states and Puerto Rico. “In our business, which is a moderate off-price business, the nature of the treasure hunt and the average price point that we operate at mean that bricks and mortar stores have a significant competitive and economic advantage over e-commerce,” says CEO Michael O’Sullivan.

“We intend to focus our energy and resources on driving profitable sales growth in our bricks and mortar stores. We will also continue to aggressively expand and upgrade this store network through our new store opening and remodel programmes.”

For and against

The move has divided opinion. Shlomo Chopp, Founder and CEO, Anchor Shops, argues in a LinkedIn post: “Thinking for today doesn’t solve for tomorrow and instead of working to innovate for tomorrow, this is a decision they are making to live only in the present.”

However, this is a perfect example of knowing your customer and your market intimately, according to Jason Greenwood, Director of Solutions at Moustache Republic. “E-commerce simply doesn’t work yet for all industries and verticals,” he says.

“For Burlington, one of the big three name brand discount fashion retailers in the USA, the business realities of ultra rapid stock churn, hyper local stock availability, razor thin margins, high return rates and high shipping costs make e-commerce non-viable. And when e-commerce constitutes only .5% of sales it makes sense to shut it down.”

“Despite the naysayers that might deride this decision, I applaud any business that makes a tough business call based on what serves their target customer best,” he concludes.