While some retailers are shuttering stores amid sluggish sales, the company behind apparel discounters Marshalls and T.J. Maxx sounded far more bullish Wednesday, saying it can see the potential to eventually open roughly 1,300 more locations in the U.S. and Canada.
TJX CEO Ernie Herrman said in an earnings call that the company can see itself potentially opening hundreds more stores, spanning several of its off-price brands.
The company division that includes T.J. Maxx and Marshalls in the U.S. could eventually add roughly 800 stores to its portfolio. But the Sierra Trading Post and HomeGoods brands in the U.S., along with the Marshalls, Winners and HomeSense chains in Canada, may also gain a larger footprint.
“For most retailers, opening more stores would not make sense,’’ says Neil Saunders, managing director of the retail analytics firm Global Data. “However, TJX is the exception to that rule. Even in the digital age, its stores are performing well and have become steadily more productive over time. This gives the company the confidence to expand.”
The company’s optimism was likely sparked by the robust sales and profit it saw in the last fiscal year, ended Jan. 28. TJX reported net income of $678 million in the fourth fiscal quarter, or $1.03 a diluted share, a 4% uptick over the 99 cents per share earned a year earlier. For the full fiscal year, net income rose 4% to $2.3 billion or $3.46 in diluted earnings per share.
TJX’s success is in marked contrast to several other retailers who are struggling to woo shoppers as a growing number of consumers do their buying on Amazon and other e-commerce sites.
Macy’s for instance, said Tuesday that sales at stores open at least a year, including licensed locations, slipped 2.1% during its fiscal fourth quarter. The department store chain shut 66 stores in the last fiscal year and is planning to close 34 more.
Other chains shutting stores include The Limited, which has closed all of its locations, and Sears which has said it will be shuttering 150 stores.
While consumers can buy everything from shoes to jewelry by clicking online, stores like T.J. Maxx and Marshalls remain a destination for shoppers who enjoy sifting through their racks and discovering discounted designer duds.
“There are . . . a lot of consumers who simply enjoy the treasure hunt nature of TJX’s offer,'' Saunders says. They "will visit because they find the stores fun and engaging.’’
HomeGoods, and several other TJX brands are far from ubiquitous, so increasing their locations in the U.S. and Canada could tap into an even larger pool of shoppers, Saunders says.
And North America is not the only continent that might see more stores. The company says that TJX International could see another 1,100 locations in the long-term in Europe and Australia.