Mad Money

Toys R Us bankruptcy created 'the perfect storm' for Ollie's Bargain Outlet, says CEO

Key Points
  • "Mad Money" host Jim Cramer sits down with Ollie's Bargain Outlet Holdings Chairman and CEO Mark Butler after earnings to see how discount retail is faring.
  • Butler speaks to how the Toys R Us bankruptcy helped boost business.
Toys R Us bankruptcy 'perfect storm' for Ollie's Bargain Outlets

Since its 2015 public offering, Ollie's Bargain Outlet Holdings has gained traction in the market. So when Toys R Us liquidated its U.S. business in March, Ollie's CEO Mark Butler seized the day.

"I think this is the perfect storm for us," Butler, also the chairman of Ollie's, told CNBC's Jim Cramer in a Thursday interview on "Mad Money."

For Ollie's, Butler said the advantages are twofold. First, "there's going to be a lot of product that's going to be available because these manufacturers are losing one of their number one, if not their number one customer," he told Cramer.

Second, Toys R Us was largely a brick-and-mortar retailer, which could mean increased traffic at other brick-and-mortar stores that sell toys like Ollie's, Butler said.

"Hopefully, a lot of [Toys R Us customers] or many of them or some of them are going to come to Ollie's and buy toy closeouts," the CEO said. "I think it's a win-win on both sides of the equation for us."

Ollie's Bargain Outlet is a Pennsylvania-based retail chain specializing in discount closeout merchandise and excess inventory. With 274 stores across 22 states, the company has been growing since its 2015 public offering, an unusual trend for the somewhat crippled retail sector.

Ollie's most recent quarter, reported Wednesday, beat Wall Street estimates yet again, topping off what Butler called "our biggest, our best, our brightest year ever."

The retailer's rewards program, Ollie's Army, has grown with the company, now boasting nearly nine million members.

Butler attributed the rise to a "trade-down effect" after the financial crisis, "where people really needed to save money, and they liked it."

And while bankruptcies in the retail space can be devastating for the retailers themselves and their customers, Ollie's tends to be a posthumous winner.

"It usually takes a little bit of time for the pain to set in until [we] become attractive on the leasing side," Butler admitted. "But we pay, we revitalize shopping centers, we bring a lot of customers and, you know, that's why our parking lots are packed, our stores are rockin'."

Watch Mark Butler's full interview here:

Toys R Us bankruptcy created 'the perfect storm' for Ollie's Bargain Outlets, says CEO

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