The TJX Cos. Inc. Tuesday put its expansion plans into overdrive.
This story first appeared in the October 23, 2013 issue of WWD. Subscribe Today.
In a meeting with investors, executives at the nation’s largest off-price chain revealed plans to expand the business, which generated $25.88 billion in revenues last year, to more than $46 billion. It said, even without new markets or nameplates, square footage could expand 60 percent in the years ahead.
Carol Meyrowitz, chief executive officer, said there are currently no plans to bring TJX to Asia. “There’s a lot of low-hanging fruit before we would enter Asia,” she commented.
Included in the TJX produce basket are substantial opportunities in Europe, where TJX hopes to more than quadruple its business to about $15 billion, evenly divided between markets it’s already in, such as the U.K., and those it plans to enter, such as France, Spain and Italy. This year, its European stores are expected to generate $3.5 billion through about 400 locations.
TJX expects to expand the store count of its largest division, the Marmaxx unit made up of TJ Maxx and Marshalls, by about 50 percent, to about 3,000 from its planned year-end count of 2,017. TJX had previously expected long-term growth to lift Marmaxx’s unit count between 2,400 and 2,600.
Revenues for the Marmaxx stores, even with the exclusion of comparable-store growth in units already operating, are expected to reach $23 billion, 27.8 percent above the division’s projected sales of $18 billion during the current fiscal year.
HomeGoods is expected to expand to about 825 units, from 450, generating revenues of $4.5 billion, up from a projected $3 billion this year.
TJX’s 345 units in Canada are budgeted to finish the year with sales of $3 billion. The company expects those numbers to grow to 450 and $3.6 billion, with the lower average amount per store a by-product of a focus on smaller markets and a degree of cannibalization as the company grows its Canadian footprint.
Meyrowitz noted that TJX continues to take a “slow and steady” approach to e-commerce, even after its December acquisition of Sierra Trading Post, a Cheyenne, Wyo., online off-price retailer. “I wouldn’t look at that today as a big opportunity,” she said, pointing out that the financial results discussed Tuesday included investments for e-commerce initiatives but only small top-line benefits from them.
The company late Monday raised its third-quarter earnings projections from a range of 73 to 74 cents a diluted share on an adjusted basis from the previous range of between 69 and 72 cents. Same-store sales are expected to increase 4 percent.
Shares Tuesday rose $1.01, or 1.8 percent, to $58.59 after hitting an all-time high of $58.86 in midday trading.
The goals provided for investors and analysts on Tuesday gave the company an opportunity to share some of the steps it’s taken to solidify its status as an off-price leader. Attendees visited a TJ Maxx prototype store before the investor presentation and were regaled with examples of how the company is reaching out to younger customers in its merchandising and marketing.
Ernie Herrman, president of the company, pointed out that TJX has a buying staff of more than 900 with 13 offices in 10 countries, and does business with more than 16,000 vendors.
Later, anticipating a question she’s asked often, Meyrowitz told guests that, even with expansion to more than 6,000 units now envisioned for the future, she’s not concerned about the ability of TJX to remain in a strong inventory position.
“The market is loaded,” she said. “The market has been loaded, and it continues to be.”