TJX maps out expansion plans
June 10, 2002,
Looking to further capitalize on a favorable economic climate for off-price retailers, The TJX Cos. plans to add a total of 600 stores across all of its divisions over the next three years, Edmond English, president and ceo, told shareholders at its annual meeting here.
Its off-price format has been resilient over the years, English said, because it "captures customers during hard times and then keeps them when times get better."
After paying tribute to its seven employees who died in the Sept. 11 terrorist attacks, English highlighted the growth potential of the company's seven formats.
Its T.J. Maxx and Marshalls divisions, which the company internally classifies together as the Marmaxx Group, holds the largest portion of the store base, with 1,290 store locations at the end of the first quarter. The company plans to add 75 new stores annually in this division, to reach a total of 1,800 at the end of nine years.
The HomeGoods format is a "unique business," said English. "We feel very positive about its growth opportunities." The division ended the first quarter with a 51 percent sales increase and comp-store sales gains of 11 percent.
The company envisions HomeGoods, which had a store base of 125 at the end of the quarter, as having the potential of growing to 500 freestanding locations, as well as an additional 150 Supercenter locations. The Supercenter format combines HomeGoods and either a T.J. Maxx or Marshalls together in a 50,000-square foot-space and now comprises approximately 40 locations in the chain, with another some 10 to be added this year, he said.
After the meeting, English estimated the domestics assortment at HomeGoods to represent about 30 percent of the merchandise mix and said he was "thrilled" with that proportion. In the past, the mix was weighted more towards commodities, but now it's more fashion-oriented, he said.
"We treat home like apparel, and we turn home like we turn apparel," he said. He added that product turns at HomeGoods have been as fast as at the Marmaxx Group.
A.J. Wright, launched in 1998 and targeting the moderate-income consumer, is the "rising star in the portfolio, with great potential," English said. With 52 stores at quarter's end, the company is expected to have more than 1,000 stores after nine years.
The company's HomeSense format in Canada, launched last year, has had "terrific customer response, and it looks like a home run to us." It had 11 stores by the end of the quarter.
In particular, the home area has performed well for the company, English said after the meeting, and TJX has strong home formats in HomeGoods, Marmaxx and HomeSense. "We are more about home fashions than home commodities," he said.
To support this swelling store base, TJX will open a total of 1.8 million square feet of distribution space this year. This includes a one-million-square-foot facility in Pittston, PA, for T.J. Maxx; a 200,000-square-foot facility in Fall River, MA, for A.J. Wright; a 300,000-square-foot facility in Toronto for Winners' HomeSense division; and a just-opened 300,000-square foot-facility in the United Kingdom for T.K. Maxx.
English added that TJX is always on the lookout for acquisition opportunities with "big rollout potential."