NEW YORK — Shares of Burlington Coat Factory Warehouse Corp. jumped 16.54 percent Monday on the disclosure that it has hired Goldman Sachs & Co. as financial adviser to explore “strategic alternatives.”
The Burlington board said the retailer is exploring options to “enhance shareholder value.” Firms that explore strategic alternatives typically are considering a sale of the company. However, the board said that “no decision has been made” to engage in a transaction and that there can be no assurance that a deal will occur.
Burlington shares closed at $42 on Monday, up $5.98, in trading on the New York Stock Exchange.
Monroe Milstein, chairman, president and chief executive officer, did not return calls seeking comment.
The Burlington, N.J.-based retailer operates 362 stores in 42 states. Nameplates under its umbrella include Burlington Coat Factory, Baby Depot, MJM Designer Shoes and Cohoes Fashions.
Speculation about a possible sale picked up earlier this month based on information from a venture capital firm, according to a financial source, who asked not to be identified.
As to whether the buyer might be strategic or financial, an analyst at a New York firm, who requested anonymity, said the likely candidate is a financial player.
“A year ago we were told that a [strategic buyer] was looking at the retailer,” the analyst said. “But now, with all the money out there and the recent deals that are being done by the private equity firms, we believe that Burlington could go to a financial player.”
Burlington said on June 2 that net sales from continuing operations for the fourth quarter ended May 28, rose 11.6 percent to $757 million compared with $678.1 million for the same year-ago period. Same-store sales for the quarter gained 7.9 percent.