Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Several years after abandoning e-commerce in the United States, TJX says new retail web sites will be crucial to its future success. "We see e-commerce as a major opportunity," CEO Carol Meyrowitz says.
Years after shutting its U.S. e-commerce sites, TJX says online retailing is key to its growth
Carol Meyrowitz, CEO of TJX Cos. Inc.—the operator of the off-price T.J. Maxx, Marshalls and other retail chains—plans to grow her company's annual sales to more than $40 billion, up 74% from $23 billion today. And though Meyrowitz hasn't announced a time schedule for that growth, she says that a key driver of it will be online retail sales. "E-commerce is clearly in our future," Meyrowitz said last month when discussing the company's 2011 financial performance and its plans for 2012 and beyond.
What a difference a few years can make in the world of e-retailing.
Things were just the opposite in the fall of 2005, when TJX's U.S. e-commerce business was buckling under $15 million in operating losses after barely one year of online sales. The company decided then to shut down its sole U.S. retail e-commerce site, TJMaxxHomeGoods.com.
But today, with growth in online sales consistently outpacing store sales across the retail industry, TJX is re-setting its sights on e-commerce as a way to both build sales on the Internet and improve support of its stores through multichannel retailing. "We see e-commerce as a major opportunity for TJX," Meyrowitz says.
Meyrowitz, who was named president of TJX as the company exited e-commerce in 2005 and stepped up to CEO in January 2007, says the company has been building a team of e-commerce experts who will build on the company's strength in the offline world of selling apparel and home furnishings brands at discount prices. TJX will provide more details on its growth plans later this year as it treads carefully back into e-commerce, Meyrowitz says, adding, "We'll take the time and do it right."
The new e-commerce sites will both complement TJX's growing store chains and leverage the strong traffic that still comes to the company's branded non-transactional sites, including TJMaxx.com, MarshallsOnline.com and HomeGoods.com, Meyrowitz says. Noting that the company's web sites scored a total of more than 1 billion impressions during the 2011 holiday season, she says the sites averaged "well over 4 million visits every month—and this is without selling merchandise online other than a small amount in the U.K." (After abandoning e-commerce in the United States, TJX continued to process online transactions through its U.K.-based TKMaxx.com, the e-commerce site for its T.K. Maxx chain.)
More stores to come
Although Meyrowitz declines to offer more specifics about the company's plans for new e-commerce sites, she says TJX is well positioned financially to invest in e-commerce and to expand its store chains. TJX plans to increase capital spending this year to as much as $900 million, and it expects to end its current fiscal year next January with $1.3 billion to $1.4 billion in cash.
By next January, TJX expects to add 160 stores in the United States, Canada and Europe, while closing about 10, resulting in a total of about 3,055 stores, chief administrative officer Jeff Naylor says. It also plans to build a major new distribution center in the United States and a new data center. In the U.S., TJX operates store brands T.J. Maxx, Marshalls and HomeGoods; in Canada, it operates Winners, HomeSense and Marshalls; in Europe, T.K. Maxx and HomeSense.
The new e-commerce sites will complement the expanded store presence by enabling TJX to offer a wider range of products, Meyrowitz says. "We believe e-commerce will open a greater landscape for categories," she says. "Just think about the potential for us to carry categories online that we wouldn't carry in our stores."
She declines to be more specific, but adds: "The more we learn, the more convinced we are of the huge opportunity e-commerce can be for us."