TJX Thrives in Shaky Economy: Report

The owner of T.J. Maxx, Marshalls and HomeGoods is outperforming competitors like Target, Macy’s and Foot Locker as inflation-weary consumers are drawn to their discounted designer brands and garage sale-style shopping, The Boston Globe reported. 

Even as other retailers struggle to draw consumers cautious about spending, TJX Corp, based in Framingham, Mass., reported a 6% increase in second-quarter comparable sales, a key measure of revenue, the Globe reported. Executives say they expect things to be favorable into 2024, the paper said.

Carol Spieckerman, founder of consulting firm Spieckerman Retail, said TJX is the epitome of the enduring retail merchant. 

“TJX has trained shoppers to expect a garage sale, in good times and bad times,” Spieckerman told the Globe.

TJX offers designer brands at 20%-60% off the original price. The company has 1,400 people to buy manufacturers’ leftover inventory from 21,000 vendors globally.

But the company is also diversifying its business strategy by partnering with brands like Michael Kors to offer custom TJX versions of their products at a discount.

Jane Singer, managing director of JDT Research in Hong Kong, told the publication that consumers are enthusiastic about purchasing prestigious brands, “even if it’s not the same merchandise that is sold in full-price stores.”

Unlike H&M, Shein and Forever 21, which have leaned on e-commerce, TJX is reliant on physical brick-and-mortar stores because shopping for treasures doesn’t really transfer to the online experience.

Over the past two years, TJX’s e-commerce sales made up less than 3% of the company’s nearly $50 billion in annual revenue, the Globe reported, citing regulatory filings. The retailer attributed its strong second-quarter results to a combination of customer foot traffic and its premium discounted merchandise.

The company is also attracting “a disproportionate number of new (younger) shoppers, which is what we really look at in terms of future growth because that’s the future higher spend,” Chief Executive Officer Ernie Herrman told analysts during a recent conference call.

T.J. Maxx was even recently part of a viral TikTok involving aspiring sorority sisters from the University of Alabama who posted Rush Week outfits that included T.J. Maxx clothing. The videos, tagged "alabama rush 2023 T.J. Maxx" on the video-sharing app, have garnered 347 million views, according to the Globe.