Which Regions Offer the Best Whitespace for Ollie's Next 750 Stores?

Ollie's Bargain Outlet operates 645 stores across 34 states as of November 2025, up from 559 at the start of the fiscal year — an extraordinary 86 net openings in just nine months. With four distribution centers now online and internal research pointing to a 1,300+ store national footprint, the question shifts from whether Ollie's can grow to where the next 750 stores should land.

The Current Footprint: Concentrated but Expanding

Ollie's began as an East Coast closeout chain and still skews heavily toward the Eastern half of the United States. The company's distribution network tells the story of its westward march:

The Princeton, IL facility — completed in Q2 2024 and shipping since July 2024 — is the linchpin. It unlocked the Upper Midwest and created the logistics backbone for contiguous expansion into states like Wisconsin, Minnesota, Iowa, and the Dakotas. At current capacity, the four-DC network supports approximately 750 stores, meaning Ollie's has runway for roughly 105 more openings before needing a fifth facility.

Whitespace Analysis: Three Priority Regions

1. Deep South and Gulf Coast — Backfill Opportunity

Ollie's already operates in states like Georgia, Alabama, and Tennessee, but store density remains well below saturation. The Southeast is the company's sweet spot: low real estate costs, abundant second-generation retail space (25,000–35,000 sq ft), and a value-oriented consumer base. The Commerce, GA distribution center has excess capacity to support incremental stores throughout Florida, Louisiana, Mississippi, and the Carolinas. With Burlington operating 1,138 stores nationally and TJX running 2,563 Marmaxx locations in the U.S. alone, the Southeast clearly supports far more off-price retail density than Ollie's has claimed.

2. Upper Midwest — The Princeton DC Dividend

The fourth distribution center in Princeton, IL was purpose-built to unlock this region. States like Minnesota, Wisconsin, Iowa, Nebraska, and the Dakotas represent largely greenfield territory for Ollie's. The contiguous expansion strategy — backfilling existing markets while pushing into adjacent geographies — makes the Midwest corridor a natural next step. Population density is lower, which means smaller addressable markets per store, but Ollie's flexible format (stores as small as 18,000 sq ft) and low initial investment (~$1 million per location) make smaller-market economics viable.

3. Mountain West and Southwest — The Long-Term Prize

The Lancaster, TX distribution center provides a toehold into the broader Southwest. States like Colorado, Arizona, New Mexico, and Utah remain largely untapped. This region presents both the biggest opportunity and the biggest challenge: distances between population centers are greater, requiring either longer supply chains from Lancaster or eventually a fifth DC. However, the off-price competitive landscape is thinner outside major metros — TJX's estimated long-term potential of 7,000 stores globally (vs. 5,085 today) signals the sector sees ample room even in less dense markets.

Unit Economics Support Aggressive Growth

Ollie's new store model is remarkably capital-efficient:

The FY2025 revenue run-rate underscores this model's power. Through the first three quarters (ending November 2025), Ollie's generated $1.87 billion in revenue — a 12.6% TTM growth rate — with a 40.3% gross margin. On a per-store basis, the existing fleet averages roughly $3.5 million in annual revenue, meaning new stores that hit their $4.0 million first-year target are actually outperforming the mature base, consistent with management's commentary about grand-opening brand excitement.

The Bankruptcy Acquisition Accelerant

A critical tailwind: 63 of the 86 stores opened year-to-date were acquired through bankruptcy auctions. The retail distress cycle — most recently from chains like Big Lots — has created an unprecedented pipeline of move-in-ready locations at below-market rents. This accelerant is inherently lumpy and will normalize, but it has effectively pulled forward 1–2 years of organic growth into a single fiscal year.

Competitive Context

Ollie's is roughly one-third the size of Burlington and one-sixth of TJX's U.S. fleet. Yet its gross margin (40.3%) significantly exceeds Burlington's (40.3% — effectively at parity) and tops TJX's (31.1%) by 900 basis points, reflecting the closeout sourcing model's inherent margin advantage. Ollie's also trades at a lower forward P/E (23.1x) than both Burlington (27.3x) and TJX (30.9x), suggesting the market hasn't fully priced in the unit growth runway.

What to Watch

• Fifth DC announcement: With the current network capped at ~750 stores, any announcement of a fifth distribution center (likely West Coast or Mountain region) would signal commitment to the 1,300-store target and unlock entirely new geography.
• Bankruptcy pipeline normalization: The 63 auction-acquired stores in FY2025 will be hard to repeat. Organic new store openings of 40–50/year remain the sustainable baseline.
• Comp store performance: As Ollie's enters less familiar markets, watch for any divergence between new-market and legacy-market comparable store sales.
• Cannibalization risk: Management acknowledges the risk of oversaturation in existing markets. The Hoffman Strategy Group's 1,300-store estimate implies significant infill remaining, but execution will matter.

Sources: OLLI 10-K (filed 2025-03-26), OLLI 10-Q Q3 FY2025 (filed 2025-09-03), OLLI 10-Q Q4 FY2025 (filed 2025-12-09), BURL 10-K (filed 2025-03-17), TJX 10-K (filed 2025-04-02), company snapshot data.