Stephen Milstein, whose family turned Burlington Coat Factory into a nationwide chain, has gotten back in the outerwear industry with Best Coat Factory, a Paramus, N.J., pop-up store that specializes in deeply discounted designer labels.
This story first appeared in the November 13, 2009 issue of WWD. Subscribe Today.
The recession has furthered the surge in savvy shoppers whom Milstein could not resist pursuing. “I kept getting solicited by friends in the outerwear industry that there was a need for our family to get back in the coat business. There is also a void for value-priced outerwear. Consumers are responding to that kind of merchandise now. Stores like TJ Maxx and Costco are the ones that are doing well now,” he said.
At this point, 18,000 square feet of the store’s 40,000-square-foot space is being used for selling, with the average markdown being 60 to 70 percent off manufacturers’ suggested retail prices. Michael Kors, Tommy Hilfiger, Kenneth Cole, Tahari, Nine West and Weatherproof are among the nearly 30 fall-winter 2009 labels being sold. Shoes and boots are also offered since “women love a pair of shoes or boots to go with a new coat,” Milstein said.
Knowing “it is very hard to sell coats year-round,” Milstein plans to keep the store at 150 Route 17N open until the end of February. Since opening Friday, many shoppers have been looking for short wool coats, fake fur jackets and “young and trendy” looks, Milstein said.
He declined to comment on projected volume or best-selling labels. If all goes well, he may open 10 to 20 year-round stores that would offer an assortment of merchandise — not just coats — including sportswear, children’s wear and men’s wear in the next 12 months. “This is my test in the market to see if I still have it,” he said.
Milstein’s father, Monroe, is serving on Best Coat Factory’s board of advisers, but he is not involved with the new company’s day-to-day operations. Under the elder Milstein’s direction, Burlington Coat Factory developed into a $3.5 billion operation. In 2006, the retailer was sold to Bain Capital for nearly $2.1 billion, with the Milstein family reaping $1.1 billion from the sale.
Having abided by his one-year noncompete contract and a three-year no-poaching Burlington Coat Factory employees edict, Milstein said he spent the past few years managing his portfolio. But his unemployment and retirement did not sit well with him. “I decided I needed more,” Milstein said.