TJX Companies CEO is positioning his stores to grab market share in the wake of a competitor’s demise.
TJX CEO Ernie Herrman said in a call with investors discussing first-quarter results that the off-price retailer will strategically reposition its inventory in the wake of Bed Bath & Beyond’s recent bankruptcy and store closures announcement. The company, which owns T.J. Maxx, Marshalls and HomeGoods, has previously been considered a likely company to benefit from Bed Bath & Beyond liquidating all of its 360 stores across the U.S.
“We’ll go in — and we’re able to do this with our planning and allocation system — and look at categories in Bed Bath & Beyond stores,” Herrman said. “And we can go in and rerank our HomeGoods stores and inventory at the nearby location where they have just vacated.”
He noted that process is strategic and localized. Reallocated inventory will be based on the products that existed in nearby Bed Bath & Beyond stores, as opposed to one sweeping motion across all HomeGoods stores.
“We don’t just go in and say, ‘Oh, we should do more of this category of business because that’s what Bed Bath & Beyond did.’ We did it by location and by the category of businesses we think they stood for. And we say, ‘Yes, there’s more market share opportunity for us in those categories,'” Hermann said.
Hermann noted that general store closures have created an “ongoing tailwind” for TJX’ business, especially in Canada and Europe. In the U.S., store closures are expected to pick up again in 2023 and could total more than 50,000 in the next five years, according to UBS.
Meanwhile off-price retailers continue to grow market share. In Q1, for instance, TJX Companies increased its store count by 30 locations to a total of 4,865. It also opened its 900th HomeGoods store.
Overall, the Framingham, Mass.-based off-price retailer reported Q1 net sales of $11.8 billion, up 3 percent compared with the prior year. Net income was $891 million and diluted earnings per share were 76 cents, up 55 percent over the prior year.