Discount retailer A.J. Wright draws in teens by offering them the brands they crave at prices they can afford.
BOSTON — The sound most often heard at moderate off-price retailer A.J. Wright, which does a strong business with teens, is not the latest Beyoncé beat or giggly celebrity sound bite issuing from in-house TV.
Instead, it’s the quick scrape of hangers along 20-foot utilitarian racks, where adolescent shoppers are intently hunting for big breaks on the brands they covet. They’re hoping to score the likes of LEI, Mudd, Lucky Brand and Rocawear. Their success in finding those brands marked down 20 to 60 percent is driving repeat visits, according to industry observers.
In its five-year-old A.J. Wright concept, TJX Cos., the Framingham, Mass.-based parent of off-pricers Marshalls and T.J. Maxx, has brought its legendary buying skills to the moderate arena and has begun to define a new market.
“They are going after an underserved customer with this concept,” said retail analyst Patrick McKeever of SunTrust Robinson Humphrey. “They are looking to be the off-priced alternative to a Wal-Mart or a Target — to be cheaper, with a greater value proposition because of the brands.”
The theory was in practice at a strip mall in Somerville, Mass., where an A.J. Wright is next door to a Target. A.J. Wright had a V-neck sweater with dickie-shirt from My Reference Point priced at $12.99, 35 percent less than a nearly identical $19.99 style from Mossimo at Target. More literal proof A.J. Wright intends to off-price the discounters turned up in a bin of handbags, where several Xhilaration styles, a Target private label, were marked $7.99 with a “compare at” of $16.
At press time, TJX executives had not responded to calls seeking comment for this story.
Yet TJX president and chief executive officer Edmond English has been vocal about the fact that 84-unit A.J. Wright is in its infancy (ultimate capacity is projected at 1,000 doors domestically) and is one of TJX’s brightest prospects for growth.
The division’s financials are encouraging. A.J. Wright’s sales per square foot increased from $200 to $225 in new stores. For the third quarter, A.J. Wright turned in a $1.8 million profit, a tidy reversal of its $3.1 million year-ago loss. In fiscal 2003, the chain reaped net sales of $277 million with roughly 50 stores.“It’s a growing business, achieving positive same-store results and developing very nicely,” said Bear Stearns analyst Dana Telsey.
Not to be outdone, TJX’s chief off-price competitor, Newark, Calif.-based Ross Stores, said last week it plans to launch its own off-price, moderate concept. Starting next July, it will bow in 10 locations on the West Coast, where A.J. Wright has no units yet, according to the TJX Web site.
While that may put pressure on A.J. Wright president George Iacono to try to spread the concept faster, the company got burned last year when an overly aggressive expansion plan led to execution problems, according to English.
The company will add 15 more doors in the fourth quarter, including entering the Detroit market. Generally, A.J. Wrights are in older, strip malls and some big box centers.
“They’re still testing different kinds of locations,” McKeever said. “They’re going for strip centers that are a cut below [average], but not necessarily in dollar-store territory.”
At first blush, it seems unexpected that family-focused A.J. Wright would be making strides with fickle youth. The company appears to do little specific marketing to youth. As well, everything from misses’ plus-sized dresses to men’s shoes to a smattering of housewares competes for space inside the 26,000-square-foot box.
Only the junior department’s larger size — and front-and-center location behind the registers — hints it’s one of the gems of the business.
“I think they’re finding, with the pricing strategy, the younger customer can afford to buy clothes for themselves,” said Bear Stearns’ Telsey.
Her observation was borne out at the Somerville store, where several pairs of teen girls shopped together without parents. At A.J. Wright, sweaters ranged from $9.99 to 12.99, handbags were $7.99 and jeans were generally between $12.99 and $19.99. Unlike sister companies Marshalls and T.J. Maxx, which produce some private label goods, A.J. Wright is 100 percent branded goods, English said at the company’s annual meeting in June.
There appeared to be more irregular goods, particularly of pricier brands like Nike or Lucky Brand, than is customary in Marmaxx stores. Back-to-school items were signed and displayed on rounders at the head of the department featuring cargo pants, activewear sets and cowl-neck sweaters.SunTrust Robinson’s McKeever said TJX corporate has whittled its lead time down to 10 weeks, a capability that allows it to watch junior fashion trends from the sidelines and pounce when a style is truly rolling.
“Their lead is well below department stores and discounters,” McKeever said. “It’s a real competitive advantage, which they haven’t fully realized because the economy is weak. But when spending picks up, it will be a huge advantage to be able to look at what’s selling and still get a piece of the action.”
Merrill Lynch analyst Marnie Shapiro commended the company for always leaving “a lot of open-to-buy, which keeps them flexible.”
“They’re very strong at inventory management,” Shapiro said. “They know when to say yes and when to say no.”
A.J. Wright has also connected with urban and minority customers, a demographic not historically strong for TJX’s other concepts, but a potential gold mine.
“The urban business is very strong,” English noted in June. “That was a piece we had not anticipated.”
The buying team is clearly responding, stocking streetwear labels that carry a premium price for the door. The store in Somerville, for instance, had a dedicated carousel of Lady Enyce novelty activewear up front, along with pieces from Fubu, Rocawear and Baby Phat. At $49.99, a Rocawear fleece dress was significantly pricier than most goods in the department.
There were lower-cost streetwear alternatives, too, such as pieces from Meow Meow, whose rhinestone kitty logo echoes Baby Phat’s.
A.J. Wright’s first TV ad campaign, which bowed this year, has a home-movie quality, featuring customers in stores giving testimonials about getting “more for less.”
“Customer testimonials really work with this audience,” said English, debuting the spot during the shareholders meeting.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia