FRAMINGHAM, Mass. — It was a good year for The TJX Cos. Inc.
This story first appeared in the June 14, 2012 issue of WWD. Subscribe Today.
Store traffic, transactions and comparable-store sales were all up in fiscal 2011, while the company’s stock gained 43 percent. But Carol Meyrowitz, chief executive officer, acknowledged at the retailer’s annual meeting Wednesday that it was fair to ask, “What’s next?”
The answer, it seems, is more of the same — expansion of the off-pricer’s core concepts. Company executives remained characteristically tight-lipped but are working on a $143 million expansion of their corporate headquarters here.
The $23.5 billion company is planning 2012 to be a more aggressive growth year, aiming to increase square footage by 5 percent. Space grew by only 2 percent in 2011 weighed down by the closure of the A.J. Wright division. In a letter to shareholders, Meyrowitz implied that the flagship Marmaxx division — which encompasses the Marshall’s and TJ Maxx chains — is capable of capturing A.J. Wright’s customer. She noted Marmaxx has “significantly widened its customer demographic” and has been “very successful in moderate income markets,” which A.J. Wright targeted. The company unveiled plans to shutter the A.J. Wright division in December 2010 and converted just over 90 doors, more than half the chain, to Marshall’s nameplates.
Meyrowitz said TJX, currently at more than 2,900 stores, can grow to 4,500 doors based on a recent market study showing brand awareness for TJ Maxx and Marshall remains “well below” that of department stores. The Marmaxx division, accounting for roughly 65 percent of net sales, generated $2 billion in profit last year, an 11 percent gain over the prior year.
TJX has ramped up its marketing, including continuing its TJ Maxx TV campaign featuring Saucy Glossie blogger Lindsey Calla. They’ll also continue store-remodeling efforts, which have brought fake-wood flooring, dressing room upgrades and a centralized check-out lane that’s flanked by small items — everything from tights to jellybeans — to trigger impulse buys. In TJ Maxx, the company has positioned The Runway, its contemporary section, at the front of the store and is heavily touting that on its Web site as well. TJX cited dresses, men’s, shoes and accessories as particularly strong performers in a year where Marmaxx comp-store sales grew 5 percent year-over-year.
As for e-commerce, TJX appears to be getting there.
“We view e-commerce as a major opportunity for TJX,” Meyrowitz wrote in a letter to shareholders, noting that should the company launch e-commerce, it can take advantage of its 700-person buying team to find off-price goods as well as its existing audience of 4 million monthly Web visitors.
Once merely a kick-back to a corporate Web site, the TJ Maxx Web site now has personality. It allows shoppers to post favorite outfits, purchase gift cards and sign up for e-mail blasts. “The more we learn, the more convinced we are of the huge opportunity e-commerce can be for TJX,” Meyrowitz noted. “That said, being the conservative company that we are, we have factored very little top-line benefit into our long-range growth model at this juncture. We will take our time and do it right.”