About the Boss
This year marks the fortieth year Tom Kingsbury, Chairman, CEO and President of Burlington Stores, has worked in the retail business. Originally planning to work for a marketing firm, Tom studied business marketing at the University of Wisconsin-Madison. However, retail was a familiar path for him since his father worked at Kohl’s, and upon graduation, after interviewing with several department stores, accepted a job at Famous Barr, a division of the May Company Department Stores, and quickly found success as a merchant. Working his way up the ranks, Tom eventually became President and Chief Executive Officer of the Filene’s division. After thirty years at May Company, he became a Senior Executive Vice President at Kohl’s, running Stores, Marketing, IT, E-Commerce and Business Development.
Looking for an opportunity to get back into the merchandising side of the business, he learned about an opportunity to become CEO at Burlington Coat Factory, a Bain Capital-owned “hybrid” department store. In 2009, he began re-shaping the company’s business model, re-defining it as a true off-price retailer. The company went public in 2013 and continues to experience success due in large part to Tom’s leadership.
Tom says there are two places people want to shop today: online and off-price. “Over the last three years, the off-price business growth has been 6%. The rest of the industry is down. We’re really a popular channel today. The reason we do so well is we believe in brands and we’re all about value. Our merchants are incredible in terms of knowing what’s going on in the marketplace. We’re very product-centric, turning our merchandise an average of 10% per week. It’s all about newness, all about freshness, all about buying in the moment. Our buyers only buy a third of our product before the season begins because we know what the customer wants to shop in the moment. Right now, over 60% of our inventory has been received in the last 30 days. We want customers to have the best assortment they could possibly have and find it quickly. While most retailers are closing stores, we’ve been adding 25 stores each year and have a clear path to 1,000 stores. Off-price is really the place to be. It’s all about the treasure hunt.”
Words of Wisdom
Focus on building the team. “You can’t do it yourself.”
Understand the people part of the business. “It’s the most important thing.”
Be involved. “Take advantage of every opportunity presented to you.”
Think like the customer. “If you focus on the customer, you’re going to grow your business. Stick with them and you’ll be successful.”
Q: “What’s one of the biggest challenges you’ve had and what have you learned from it?”
A: “At May Company as a Vice President at 28, I learned that you have to develop your team. It didn’t matter if I had the greatest business model ever. If I didn't have a team that would be able to execute it, it wasn’t going to be successful.”
Q: “Do you see online and off-price overlapping?”
A: “We actually were the first off-price retailer to go online in 1999. We sold coats - now we’ve ramped it up and E-Commerce is important to us but it’s still only 1% of our business.”
Q: “With companies putting out product so fast, how do you address customers’ desire for transparency?”
A: “It is important to us to do business with companies that we trust and who align with our Core Values. We don’t do a lot of business with companies that aren’t nationally recognized. If we did ever have an issue with a manufacturer over the way they treated their workers, we would stop doing business with that company.”
Q: “How do you compare to other off-price retailer’s marketing efforts?”
A: “In off-price, marketing isn’t as significant as it is in a traditional retailer. Our marketing spend is less than 2% of our revenue. We’re more focused on our customers’ testimonials about the great deals they’re getting in our stores. It has resonated so well with customers. We talk to our customers all the time. We call them “Customer Chats.” Customers tell us about the great deals they’ve found. It’s really helped grow our business.
Q: “How do you address customers who are unhappy?”
A: “We really work hard on addressing our customers up front, talking to customers and using that information to develop and execute the off price model. I visit the stores frequently in an effort to learn from the customers, and from the associates. As a result, we don’t have very many bad reviews.”
Special thanks to Tom Kingsbury for hosting such an inspiring breakfast for FSF Scholars!
Stay tuned for our next recap!
- Katherine Manson, 2016 FSF Scholar