Betting shoppers still like stores, owner TJX Cos. has more sales than Nordstrom and Penney combined
A T.J. Maxx store in New York City. The off-price chain is expanding as department stores and apparel retailers close stores Photo: Kevin Hagen for The Wall Street Journal
Traditional retailers are in crisis, damaged by rapidly shifting consumer tastes, technological change and cut-throat price competition. And then there’s TJX Co TJX -2.64% s., which is defying gravity with the simple idea that under the right circumstances people still like to shop in stores.
The owner of T.J. Maxx and Marshalls has seen sales at stores open at least a year rise for 33 straight quarters. Its annual sales exceed those of Nordstrom Inc. JWN -3.52% and J.C. Penney Co. JCP -5.17% combined. The company’s market value is almost seven times that of Macy’s Inc., M -2.07% which was once the more valuable company.
TJX gets almost all its sales from its roughly 3,800 physical locations and plans to open 250 stores this year. Its revenue and profits are climbing and it envisions expanding to 5,600 stores worldwide over time.
The Framingham, Mass. company isn’t shifting business online or using big data to figure out what shoppers want. Instead, it has become one of the country’s fastest-growing retailers by sticking with a playbook from a vanishing era. It relies heavily on the instincts of its merchandise buyers, many of whom have been with the company for decades. TJX stores rapidly turn over limited quantities of products that are all sold at bargain prices. The result is a rarity in retail—a constant treasure hunt.
“Fresh merchandise hitting the floor is key,” said Paul Sweetenham, a former senior executive at TJX’s European division. “It’s a very simple business model, but it’s hard to execute.”
Little is known publicly about how the retailer executes its strategy, and TJX declined to make current executives available for interviews. The Wall Street Journal pieced together how the company operates from conversations with former executives and people familiar with its business practices. Debra McConnell, a TJX spokeswoman, confirmed some facts about its strategy.