Words "Bed Bath & Behond" with an arrow pointing up to "T.J.Maxx" and a big question mark
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TJX Companies has reported a very profitable Q2 2024, including an average 6% bump to comparable store sales across its banners, thanks to an inflation-friendly business model and the opportunities created by the shutdown of Bed Bath & Beyond’s physical footprint. This could also help HomeGoods and T.J.Maxx gain market share as former Bed Bath & Beyond customers look for an in-person place to shop now that their preferred banner has moved online.

“HomeGoods, and to a slightly lesser extent T.J.Maxx, have been beneficiaries of the demise of Bed Bath & Beyond,” said managing director at GlobalData Retail Neil Saunders, who is a member of the RetailWire BrainTrust, in an interview with RetailWire. “In certain categories like home storage, décor, soft furnishings, and kitchenware, HomeGoods has picked up customers who would once have shopped at Bed Bath & Beyond. TJX has been very targeted in its approach; it looked at stores close by to former Bed Bath & Beyond shops and ensured that categories that were once sold at Bed Bath & Beyond were well stocked and given emphasis.”

The improvement Saunders noted at HomeGoods is particularly noticeable. The retailer posted a 4% year-over-year comparable sales gain for Q2 2024, up from a 13% decline in Q2 2023 and a 7% decline in Q1 2024. Marmaxx, the division encompassing both Marshalls and T.J.Maxx, reported even higher comparable sales growth at 8% for the quarter, but the banners were coming back from a smaller 2% comparable sales deficit in Q2 2023 and had achieved 5% growth as of Q1 2024.

The banners were able to clear out some excess inventory as well. Inventory levels at the end of Q2 2024 were $6.6 billion, compared to $7.1 billion a year ago. Retailers in general struggled with inventory levels throughout 2022, and returning to normalcy will help TJX Companies better position itself for future success.

Saunders noted that TJX Companies also benefited from its off-price positioning, which made it an ideal destination for shoppers looking to save money or stretch their budgets. Middle-class and upper-middle-class consumers have been looking for deals, particularly in categories like apparel, and TJX has been there to meet their needs. 

This is the first quarter that all of TJX Companies’ banners saw a positive sales trajectory in some time, and CEO Ernie Herrman said on a call with investors that he is “bullish” about HomeGoods’ prospects during the second half of fiscal 2024. With the opening left by the departure of Bed Bath & Beyond, HomeGoods in particular has the potential to capture e-commerce-shy home goods shoppers across the U.S.

“I think the demise of Bed Bath & Beyond is the gift that will keep on giving to TJX,” said Saunders. “While some former customers will migrate online, a lot liked to shop in person, so a digital-only Bed Bath & Beyond may not be appealing. These people are looking for alternative physical stores, and TJX’s banners are one of the places they are migrating to.”

BrainTrust

“HomeGoods is more of a treasure hunt store whereas BB&B stores were predictable…but the TJX companies, as a whole, certainly will fill the gap left by the demise of BB&B.”

Bob Amster

Principal, Retail Technology Group


“TJX…is a well-oiled, off-price juggernaut and its HomeGoods banner has evolved into a strong player in its own right.”

Mark Ryski

Founder, CEO & Author, HeadCount Corporation


“The real stores that will be filling the gap are discount stores (as they continue to expand) and Amazon, which has mastered delivery and ease of ordering.”

Shelley E. Kohan

Associate Professor, Fashion Institute of Technology

Discussion Questions

DISCUSSION QUESTIONS: How well will TJX Companies be able to fill the gap left bey Bed Bath & Beyond? Are there any other retailers that you believe will benefit from the closing of Bed Bath & Beyond’s stores?

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Have you shopped at any TJX Companies banners since the start of the year?

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10 responses to “Is TJX Companies’ Among the Biggest Benefactors of Bed Bath & Beyond’s Demise? ”

  1. Neil Saunders Avatar
    Neil Saunders

    At the time it went bankrupt, Bed Bath & Beyond had annualized revenue of around $2.2 billion. Most of these sales will not disappear entirely, they will be reallocated to other retailers. From our tracking, the gains have, so far, been spread quite widely with Walmart, Amazon, Target, Container Store, Best Buy, IKEA, At Home, and many others receiving some of the spoils. TJX is also a beneficiary, especially via HomeGoods. This is partly because there is an overlap of stores in some locations, and partly because their deal-focused offers appeal to old Bed Bath & Beyond consumers. However, TJX also deserves credit for preparation. When it knew Bed Bath & Beyond was likely to go under, a plan was put in place to ensure stores near failing locations were stocked with the right merchandise and placed in a position to pick up custom and sales where categories overlapped. TJX may not sell all of the things offered by Bed Bath & Beyond, but this simple move made them a beneficiary of their failure.

  2. Mark Ryski Avatar
    Mark Ryski

    Bed Bath & Beyond left a big hole in the market that TJX — and HomeGoods in particular — is delighted to fill. But TJX’s success is about more than the demise of Bed Bath & Beyond. TJX has been a strong for many years, as the off-price category continued to perform well. But let’s also give credit to the team at TJX – they’re not just living off good market conditions and the demise of Bed Bath & Beyond – this is a well-oiled, off-price juggernaut and its HomeGoods banner has evolved into a strong player in its own right.

    1. Cathy Hotka Avatar
      Cathy Hotka

      Juggernaut is right. TJX’s stores are exceptionally well-run, clean, and merchandised. What a delightful experience.

  3. Bob Amster Avatar
    Bob Amster

    While I agree with my colleagues in the Braintrust, Home Goods is more of a treasure hunt store whereas BB&B stores were predictable. If you were going to purchase an OXO potato peeler, you would go to BB&B and buy it because Home Goods might not have any. To that extent, I think that Home Goods may not take over so much of the BB&B base as would other stores in similar business but the TJX companies, as a whole, certainly will fill the gap left by the demise of BB&B brick and mortar.

    1. Shelley E. Kohan Avatar
      Shelley E. Kohan

      I agree that TJX can pick up some of the BBB business, but the real stores that will be filling the gap are discount stores (as they continue to expand) and Amazon, which has mastered delivery and ease of ordering (Oxo Peeler, $12 and delivered in two, sometime one day).

    2. Allison McCabe Avatar
      Allison McCabe

      That’s my reaction as well, Bob. BB&B was a destination for specific items. Knowing how savvy TJX/Home Goods merchants are, there is no doubt they will find a way to address the classification demand if in a somewhat less regimented approach. And there will probably be some excess merchandise out there in those areas available to stock in in Home Goods.

  4. Jenn McMillen Avatar
    Jenn McMillen

    Don’t forget that we also lost a $1B player with the demise of Tuesday Morning, which also had more of that treasure hunt mentality that HomeGoods has.

  5. Jeff Sward Avatar
    Jeff Sward

    Between TJX, Target and Walmart the former BB&B customer does not have to travel far to fill their needs, and still enjoy a great level of predictability and value. I’d love to add Kohl’s and Macy’s Cellar to that list, but they don’t seem to be as top of mind as the others.

  6. Dick Seesel Avatar
    Dick Seesel

    I think the “lost” BBBY sales get spread around — after all, the company sales approached $12B at its peak instead of looking at when it hit bottom. Home Goods will benefit, but everybody from Target to Kohl’s is making a play for those sales by remerchandising their selling floors. Predictable inventory management and in-stock levels may turn out to be more important than the “treasure hunt” mentality in the long run.

  7. Craig Sundstrom Avatar
    Craig Sundstrom

    I think the sales (re)distribution will be quite spread out (who knows? maybe even JCP will benefit!). And while no ONE company will be able to “fill the gap”, I don’t think collectively all retailers will have any trouble at all filling it…which of course is a big reason why BBB isn’t around any more.

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Neil Saunders
Neil Saunders
Noble Member
28 days ago

At the time it went bankrupt, Bed Bath & Beyond had annualized revenue of around $2.2 billion. Most of these sales will not disappear entirely, they will be reallocated to other retailers. From our tracking, the gains have, so far, been spread quite widely with Walmart, Amazon, Target, Container Store, Best Buy, IKEA, At Home, and many others receiving some of the spoils. TJX is also a beneficiary, especially via HomeGoods. This is partly because there is an overlap of stores in some locations, and partly because their deal-focused offers appeal to old Bed Bath & Beyond consumers. However, TJX also deserves credit for preparation. When it knew Bed Bath & Beyond was likely to go under, a plan was put in place to ensure stores near failing locations were stocked with the right merchandise and placed in a position to pick up custom and sales where categories overlapped. TJX may not sell all of the things offered by Bed Bath & Beyond, but this simple move made them a beneficiary of their failure.

3
Mark Ryski
Mark Ryski
Trusted Member
28 days ago

Bed Bath & Beyond left a big hole in the market that TJX — and HomeGoods in particular — is delighted to fill. But TJX’s success is about more than the demise of Bed Bath & Beyond. TJX has been a strong for many years, as the off-price category continued to perform well. But let’s also give credit to the team at TJX – they’re not just living off good market conditions and the demise of Bed Bath & Beyond – this is a well-oiled, off-price juggernaut and its HomeGoods banner has evolved into a strong player in its own right.

3
Cathy Hotka
Cathy Hotka
Active Member
Reply to  Mark Ryski
28 days ago

Juggernaut is right. TJX’s stores are exceptionally well-run, clean, and merchandised. What a delightful experience.

1
Bob Amster
Bob Amster
Active Member
28 days ago

While I agree with my colleagues in the Braintrust, Home Goods is more of a treasure hunt store whereas BB&B stores were predictable. If you were going to purchase an OXO potato peeler, you would go to BB&B and buy it because Home Goods might not have any. To that extent, I think that Home Goods may not take over so much of the BB&B base as would other stores in similar business but the TJX companies, as a whole, certainly will fill the gap left by the demise of BB&B brick and mortar.

3
Shelley E. Kohan
Shelley E. Kohan
Member
Reply to  Bob Amster
28 days ago

I agree that TJX can pick up some of the BBB business, but the real stores that will be filling the gap are discount stores (as they continue to expand) and Amazon, which has mastered delivery and ease of ordering (Oxo Peeler, $12 and delivered in two, sometime one day).

1
Allison McCabe
Allison McCabe
Active Member
Reply to  Bob Amster
28 days ago

That’s my reaction as well, Bob. BB&B was a destination for specific items. Knowing how savvy TJX/Home Goods merchants are, there is no doubt they will find a way to address the classification demand if in a somewhat less regimented approach. And there will probably be some excess merchandise out there in those areas available to stock in in Home Goods.

1
Jenn McMillen
Jenn McMillen
Member
28 days ago

Don’t forget that we also lost a $1B player with the demise of Tuesday Morning, which also had more of that treasure hunt mentality that HomeGoods has.

1
Jeff Sward
Jeff Sward
Active Member
28 days ago

Between TJX, Target and Walmart the former BB&B customer does not have to travel far to fill their needs, and still enjoy a great level of predictability and value. I’d love to add Kohl’s and Macy’s Cellar to that list, but they don’t seem to be as top of mind as the others.

0
Dick Seesel
Dick Seesel
Active Member
28 days ago

I think the “lost” BBBY sales get spread around — after all, the company sales approached $12B at its peak instead of looking at when it hit bottom. Home Goods will benefit, but everybody from Target to Kohl’s is making a play for those sales by remerchandising their selling floors. Predictable inventory management and in-stock levels may turn out to be more important than the “treasure hunt” mentality in the long run.

0
Craig Sundstrom
Craig Sundstrom
Active Member
28 days ago

I think the sales (re)distribution will be quite spread out (who knows? maybe even JCP will benefit!). And while no ONE company will be able to “fill the gap”, I don’t think collectively all retailers will have any trouble at all filling it…which of course is a big reason why BBB isn’t around any more.

0