DISCUSSION
Are Americans ready to do some good old-fashioned ‘revenge shopping’?
Written by George Anderson
Photo: RetailWire
TJX Companies’ fourth quarter report did not reveal the type of positive results that have become routine for the parent company of Homegoods, Marshalls and TJ Maxx in recent years, but its CEO still sees the glass as well past half full going forward.
Ernie Herrman, TJX CEO, believes he has plenty of reasons for optimism. For one, the quarterly drop in same-store sales at the company’s properties was down only seven percent despite well reported spikes in the number of novel coronavirus cases during the 13 weeks ending Jan. 30 and the shopping restrictions that have been imposed during the pandemic.
He also believes that a number of opportunities are developing in the market that will benefit TJX going forward. Speaking on the company’s earnings call yesterday, Mr. Herrman pointed to the job that TJX buyers have done cementing relationships with existing vendors while recruiting new ones.
“Our buyers opened thousands of new vendors across good, better and best brands and sourced from a universe of approximately 21,000 vendors around the world,” said Mr. Herrman. “We believe all of this puts us in an excellent position to keep offering consumers an eclectic mix of branded merchandise at amazing values.”
The TJX CEO also thinks there is prime retail real estate to be had as many other chains have closed stores. This may mean expanding the number of stores the retailer operates in some markets while moving existing stores to better locations in others.
On the capital expenditure side, TJX is planning to invest between $1.2 billion and $1.4 billion worldwide on new stores (76 net new locations in the U.S.), remodels and on the company’s distribution network and infrastructure.
Believing 2021 will be a better year than 2020, TJX also plans to launch marketing campaigns to promote its individual banners. Each campaign will “reinforce our value leadership,” according to Mr. Herrman. They “will also highlight the elements of discovery, variety and quality, which are all major strengths for us.”
“We have a tremendous opportunity to capture additional market share, even beyond the prospect of a resurgence in consumer spending and ‘revenge shopping’,” said Mr. Herrman. “Once vaccines are widely available, longer term, we are convinced that our flexible off-price model has structural advantages with our entertaining and engaging treasure hunt shopping experience, differentiated assortment of branded merchandise and our excellent values.”
- The TJX Companies' (TJX) CEO Ernie Herrman on Q4 2021 Results – Earnings Call Transcript - Seeking Alpha
- The TJX Companies, Inc. Reports Q4 and Full Year FY21 Results; Reports Above-Plan Q4 Overall Open-Only Comp Store Sales of Down 3%; Plans to Declare Quarterly Dividend at Current Rate in the First Quarter of Fiscal 2022 – The TJX Companies, Inc.