Western apparel retailer Boot Barn Holdings Inc.’s (NYSE: BOOT) brick-and-mortar pipeline has never been busier.
The Irvine-based company saw 15%-unit growth in its store openings during its 2023 fiscal year with 45 new locations and five new states.
“It’s the biggest add we’ve done in our history in the sense of brand-new stores, outside acquisitions,” Chief Retail Officer Mike Love told the Business Journal.
Boot Barn’s footprint totals 352 stores spanning 44 states with a goal of reaching 900 locations in the next several years.
Orange County is part of that pipeline.
It recently opened its fourth outpost in the county with a store on the Tustin side of the The Market Place shopping center. The shop, located some 7 miles from the company’s headquarters, opened in May with more than 12,000 square feet of selling space, neighboring Party City and Nordstrom Rack.
“It’s well developed and well maintained,” Love said of the Irvine Co.-owned retail center. “It’s a lot of what we look for.”
The shopping hub, which straddles Irvine and Tustin along Jamboree Road, is OC’s third-largest center with $663 million in taxable sales for 12 months ended June 2022, according to Business Journal data.
The retailer’s strategy of late includes tapping nontraditional markets for a western retailer, expanding beyond its traditional base in Texas, California and Southern states.
“Vibrant retail centers” with complementary co-tenants are ideal sites for Boot Barn stores, Love noted.
Retail Runway
More than 85% of Boot Barn’s business is generated through physical stores.
Chief Executive Jim Conroy expects that trend to stay, though digital is playing a larger role through the introduction of dual options like online ordering with in-store pickup, Love said.
Boot Barn reported an 18% decline in e-commerce same-store sales and a 3% decrease in its retail stores sector during the fourth quarter of fiscal 2023. Net sales for the 14-week period ended April 1 totaled $426 million, up 11% from a year ago, according to its earnings report.
The retail firm has been updating older, smaller stores from the beginning of Boot Barn’s operations to keep up with current average unit volumes. Two years ago, it moved its Orange location to a space double the square footage from the original location. An average store spans roughly 11,000 square feet.
The company expects to add 10 or more units each quarter.
“There’s a runway there,” Love said.
Boot Barn’s focus will remain on the U.S., with plans to soon operate in 48 states, Love said. All 50 are in the cards once logistics for Alaska and Hawaii can be determined, he added.
Despite international interest, there are no current plans to expand abroad.
Customer Crossover
Demand for new stores follows a surge in popularity among a new, more mainstream demographic.
Boot Barn’s original consumer base included working-class and core-western regulars. It was the essential workers that kept its store doors open during the pandemic compared to other mall-based chains, according to Love.
During a 2022 earnings call, Conroy pointed to a “significant number of new customers” in the past three years at Boot Barn.
Newcomers to the brand are being defined casual, country customers while others fall into an outdoor category.
“We’ve been trying to grow our addressable market by standing next to that concentric circle,” Love said, with growth bolstered by an expansion of product lines.
When it comes to the new location at The Market Place, Love noted a possible crossover in the center’s consumers—specifically among these newer markets.
Neighbors such as home improvement store Home Depot can “attract those with a likely affinity” for its product categories with retailers like REI bringing in the outdoor consumers.
Boot Barn reports an active customer count of around 6.8 million.
“The customer decides who wins and loses in retail,” Love added. “They always have.”
Pop culture appears to intersect with the retailer’s niche market, such as the popular Paramount Network television drama “Yellowstone,” which has been credited for a major increase in activity in the western apparel and accessories sector, according to a report in Forbes last year, though Love notes shopping flow from TV viewers has been a relatively small piece of the pie.
Boot Barn is involved in the country music industry and with its listeners. It has sponsored various festivals and featured retail pop-ups, such as during this month’s CMA Fest in Nashville. The return of rodeos and concerts in 2021 were highlighted as tailwinds during analyst calls at the time.
The company is currently valued at $2.3 billion with shares up slightly around 2.3% year-to-date at $77.85.
