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Burlington Coat Factory Files for IPO

The filing confirms a story in WWD last month that owner Bain Capital was considering an initial public offering as a partial exit strategy.

Burlington Coat Factory is set to become a public company again.

The company, under its parent, Burlington Holdings Inc., filed a Form S-1 with the Securities and Exchange Commission on Thursday. The filing confirms a story in WWD last month that owner Bain Capital was considering an initial public offering as a partial exit strategy. It’s a strategy that also was employed by private equity firms TPG and Warburg Pincus, the owner of Neiman Marcus. Earlier this week, Neiman Marcus filed a registration statement indicating its intention to go public.

The number of shares and price range have not been determined. The registration statement listed a proposed maximum offering price of $175 million, essentially a placeholder to determine a registration fee.

According to the filing, sales in the off-price channel have grown “over 10 times faster” than the department store and national chain channels. Burlington said it believes the increasing demand for off-price will continue, driven by consumers’ growing focus on, and preference for, the value available at off-price retailers.

Burlington Coat was acquired in 2006 by the private equity firm in a transaction valued at $2.06 billion.

The company said in the filing that it purchases the majority of its merchandise in-season to take advantage of the latest fashion trends. It hired Tom Kingsbury in December 2008 as president and chief executive officer to revamp operations and transform the business, including improvements in buying, inventory management and supply-chain investment.

Under his initiatives, the company has invested in technology and has built a data-driven testing culture. The retailer has also fine-tuned its focus on its core female customer, who is between ages 25 and 49 with annual household income of between $25,000 and $75,000. The retailer has also improved product offerings in women’s ready-to-wear, shoes and accessories to increase the frequency of visits and average spend of its core customer.

For the year ended Feb. 2, 2013, or fiscal 2012, the company posted net income of $25.3 million on net sales of $4.13 billion. Fiscal 2012 consisted of 53 weeks. Comparable-store sales for the 52-week comps period rose 1.2 percent.

The retailer operates 503 stores, with an average store size of 80,000 square feet. The business model uses an “everyday low price” value proposition that offers consumers savings of up to 60 to 70 percent off the regular prices found in department and specialty stores. Since the acquisition by Bain, Burlington has opened on average 23 new stores per year.

The filing said the company intends to use the net proceeds from the sale of common stock to redeem certain senior notes and for general corporate purposes. Following the IPO, Bain is expected to remain as majority shareholder. The IPO gives the private equity firm a partial exit of its investment.

Burlington was founded in 1924 as a manufacturer of women’s coats and outerwear. It was later incorporated as Burlington Coat Factory Warehouse Corp. in 1972, when Monroe G. Milstein opened the first store in Burlington, N.J. Monroe and his father Abe were wholesalers of women’s coats and suits. The company went public in 1983 before being taken private when it was acquired by Bain.