TJX’s Next Act
April 3, 2014-- Home Textiles Today,
So a lot of retailers said they had a pretty decent holiday season, and the fourth quarter was humming along until the no-good, very bad, incredibly awful month of January came along and dumped snow all over their results.
But as fourth quarter reports rolled out recently, TJX Cos. was the rarest of entities: a retailer decidedly not singing the blues.
Yes, net income during the period dropped 3.7% and sales ticked up only 1%. A mere blip, apparently, on the path into a new fiscal year for which the retailer has some very ambitious plans. Among them:
• A new prototype for Marshall’s;
• Two additional units – under a new prototype – for four-store and internet retailer Sierra Trading Company, which TJX acquired in late 2012;
• Expansion of home as part of Sierra Trading Company’s ecommerce business with an emphasis on value pricing and outdoor living merchandise;
• Additional product expansion on tjmaxx.com, which got into ecommerce only a few months ago and as yet does not include a home assortment;
• Remodels for some 250 U.S. stores;
• Expansion into Austria. Oh, and TJX Cos. kicked off the new year by once again revising upward the number of stores it believes it can ultimately operate for each of its North American formats:
• Marmaxx growing 50% to 3,000 stores, reflecting 400 more units than earlier estimated;
• HomeGoods with potentially more than the originally planned 825 stores, a number TJX ceo Carol Meyrowitz said “could be conservative;”
• TJX Canada expanding long-term to 450 stores, representing 30% growth, with the possibility of growing Canada's Marshall’s chain to 100 stores.
How much potential does TJX see in HomeGoods, which ended the year with 450 stores? Meyrowitz mentioned during the company’s fourth quarter conference call last month they’re installing a unit near her home so she can spend more time with the format. Note: HomeGoods generated a 7% increase in same store sales last year, besting Marmaxx (+3%), TJX Europe (+6%) and TJX Canada (0%).
Now look at what TJX’s competitors have planned for the year. Target’s trying to recover from the impact of the holiday data breach – and get its act together in Canada. Walmart is trying to revivify same-store sales growth. JCPenney is still working to win back the customers who deserted it during the unsuccessful “transition” of fall 2012/spring 2013. Kohl’s is trying to get its mojo back. Sears will probably sell off more assets to keep up liquidity.
TJX, on the other hand, is rocketing ahead. The company could hit $30 billion in annual sales this year. The goal over time: $40 billion.
If there are any retailers out there wondering where their customers have gone to, we may have an answer.
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