Off-price giant The TJX Cos. Inc. is starting to flex its muscles in the online world.
The retailer, which raked in sales of more than $23 billion last year, said Friday it spent about $200 million to acquire Sierra Trading Post, a Cheyenne, Wyo., online off-price retailer.
TJX said the business would be “slightly accretive” in the next fiscal year, but would have a minimal impact on its consolidated financial statements.
Sierra Trading Post launched its e-commerce business in 1999 and has grown to more than $200 million in annual revenues selling branded apparel, footwear and home furnishings. It turns a profit and employs about 700 people, whom TJX noted have “substantial e-commerce experience and expertise.”
“We continue to plan on launching e-commerce sites for TJX brands and this acquisition adds immediate scale, capabilities and infrastructure in e-commerce, which we can leverage in that regard,” said Carol Meyrowitz, TJX’s chief executive officer.
“We will be able to build upon this platform as we continue to develop our e-commerce strategy,” she said. “Further, we are confident that TJX can help grow the Sierra business profitably through our buying scale, marketing and our other capabilities.”
TJX is one of the largest retailers in the U.S. and known as a savvy operator with plenty of financial pull. Its entry into the online arena could increase competition for Macy’s Inc., Kohl’s Corp. and scores of others who already have sizable and quickly growing e-commerce businesses.
TJX said Peter J. Solomon Co. and Bank of America Merrill Lynch served as its financial advisers on the deal. Bankers are working through the holidays to close transactions this year and avoid a potentially higher tax rate in 2013.