ATLANTA — Carol Meyrowitz, president and CEO, TJX Cos., stressed at the off-price retailer’s annual stockholders’ meeting here Tuesday that her company is doing all it can to make sure its databases are secure and again apologized to customers for the security breach TJX discovered in mid-December.
However, she said, “Computer crime has become big business. It’s international and very complex. Unfortunately, no system can be 100 percent safe, even with the best security, but we’re continuing to invest time and money to protect our systems and we will continue to be dedicated to this cause.”
TJX, which operates T. J. Maxx, Marshalls, A.J. Wright, Bob’s Stores and HomeGoods in the U.S., held its annual meeting at the SunTrust Plaza/World Trade Center in downtown Atlanta before a small gathering comprised mostly of TJX board members and management.
Meyrowitz said she and Bernard Cammarata, chairman, had heard from many of the company’s customers about the data breach. “We wish this had never happened,” she said. “If these cyber criminals were in the room today, I would not act like a lady. Unfortunately, sophisticated cyber criminals broke the locks on the computers but we did have locks.”
TJX discovered the breach in December, notified the Secret Service and other law enforcement agencies on Dec. 22, and banks and payment card and check processing firms on Dec. 26 and 27. The company waited until Jan. 17 to make a public announcement, explaining that law enforcement officials had advised an immediate announcement could compromise the investigation.
Sherry Lang, senior vice-president, investor and public relations, said the company did not have an update on effects of the breach since it reported first quarter results of fiscal 2008 on May 15. At that point, TJX recorded an after-tax charge of approximately $12 million, or 3 cents per share, for costs incurred during the first quarter, which ended April 28.
TJX also recorded a pre-tax charge of about $5 million, or 1 cent per share, for costs incurred through the fourth quarter in connection with the computer intrusion. TJX has said it doesn’t know how much the intrusion will cost.
Lang also had no update on the number of customers affected.
Meyorwitz said TJX is off to a solid start in 2007 [and fiscal 2008]. She said she and Cammarata had set “profitable sales” as the top priority for the company, and that the company had succeeded in achieving that goal.
“We exited the first quarter with great momentum and even more liquidity that at the same time last year, which gives us more opportunity for off-price buys in the marketplace, and I must say there are plenty.”
Lang said TJX plans to increase square footage of stores on a consolidated basis by about 4 percent. Marmaxx, comprised of Marshalls and T.J. Maxx, gets the lion’s share of new stores with about 50.