With surprising stealth, T.J. Maxx (TJX) has revived its online presence.
Quietly, without fanfare or even an official announcement, TJX just appeared online, after a protracted, eight year absence. In fact, the lack of a more press-grabbing debut has generated quite a bit of buzz of its own, sparking speculation on the off-price retailer’s strategy.
Jennifer Davis, senior retail analyst at Lazard Capital Markets, said, “I’m not too surprised they didn’t make an announcement. They want to make sure they can do it right and profitable. They want to start slow and make sure they can handle it.”
TJX originally launched a retail website in 2004 but closed down after only a year, stymied by a weak response from its customers. Many experts believe that its unconventional business model was poorly suited to online retail. TJX purchases most of its inventory from more than 16,000 different vendors, often in small, haphazard batches of disparate styles and sizes. It has become famous partially for its eclectic offerings but the same breadth of product made online shopping daunting to many consumers.
Also, the sheer magnitude of its inventory, constantly in flux, proved difficult to keep suitably updated on its website. Regularly updating prices, providing helpful descriptions of products, as well as accurate photos, became an unmanageable enterprise.
Now, TJX intends to streamline their internet offerings, focusing more on higher priced items and more exclusive brands.
Sherry Lang, a spokesperson for TJX, said, “We have a very strong team at TJX that has been working on this. Certainly, the experience and expertise that Sierra brought to the company have been helpful. chain’s stores.Consumers like to shop all kinds of different ways. There are some people who shop online and because T.J. Maxx doesn’t have a website, that consumer might not shop at all. It’s a way to gain a new customer or an incremental sale from an existing customer.”
TJX’s brisk in-store sales has largely liberated it from a reliance upon cyber-sales. Baker said, “They haven’t really needed” online sales. “Their business has been so strong without it. There hasn’t been a great urgency to launch.”
TJX has been flourishing in a challenging economic environment. The company’s net income topped an impressive $479.6 million, up from $421.1 million. Additionally, sales increased a hefty 8% to $6.4 billion. Comparable store sales leapt 4% and gross margin, unlike JCP, rose 0.7% to 28.8%. The overall increase in second quarter earnings registered at a brisk 13.9%.
Analysts expect TJX’s adjusted earnings per share to hit $2.74-2.80, better than the earlier estimate of $2.70-2.78. The increasingly dominate chain raked in $932.4 million in net income for the first half of the year, up 11% from $840.3 from last year.
Carol Meyrowitz, TJX CEO, was predictably elated. “We are very pleased with our above-plan second quarter results which were achieved over high year-over-year comparisons for quarterly comp sales and earnings per share growth,’ he said.
Meyrowitz expressed enthusiasm regarding the company’s inventory as well as its growth potential for physical stores. “We are in an excellent inventory position, which gives us the flexibility to capitalize on the great brands and fashions available to us in the marketplace.We remain confident that our strong top- and bottom-line growth will continue and we will grow TJX to be a $40 billion plus company,” she said.
TJX’s inconspicuous reentry into the field suggests it will proceed cautiously, anxious to avoid the mistakes that previously sunk its online plans. Still, many experts contend that this is a excellent time for a second effort at a grander, more omnichannel oriented business plan. Davis said, “It makes economic sense.”