T.J. Maxx and Marshall’s gained access to more premium outdoor apparel brands and began selling kayaks in the fiscal third quarter ended Nov. 1 even as their parent company opened two new Sierra Trading Post locations in Denver.
“Marmaxx is definitely on the outdoor theme, and it’s another great opportunity,” Carol Meyrowitz, CEO for The TJX Companies Inc. told analysts during the company’s third quarter earnings call.
MarMaxx refers to T.J. Maxx, Marshall’s and Sierra Trading Post, which generated combined net sales of $4.67 billion in the United States in the fiscal third quarter, up 4.2 percent compared with the comparable quarter a year ago.
MarMaxx’s same-store sales were up 1 percent on top of a 4 percent increase a year earlier. In Canada, TJX sales increased less than 1 percent to $792 million on a 3 percent increase in same-store sales on top of last year’s 2 percent gain. While TJX reduced its U.S. store count by 23 compared with a year earlier, it opened two Sierra Trading Post stores in Denver, expanding that banner to six locations.
In Europe, net sales grew 8.0 percent to $1.05 billion, while same-store sales declined 1 percent on top of a 5 percent gain a year earlier. Executives said comps and traffic met expectations in August and September, but slowed dramatically with unseasonably warm weather in October in both North America and Europe. The apparel business rebounded sharply as cold weather arrived in November.
“The upside to the warm weather at the marketplace in Europe is flooded with amazing deals on amazing merchandize,” said Meyrowitz.
While merchants from T.J. Maxx and Marshall’s attend some of the same trade shows and compare notes, they have been pursuing outdoor brands independently.
“Whether we had Sierra Trading or not, we would be going after that,” said TJX President Ernie Herrman. “So even the kayaks that you saw, that was something they actually initiated at Marmaxx and it had nothing to do with Sierra.”
Because tjmaxx.tjx.com and marshallsonline.com dont allow users to search by brand and because outdoor vendors may restrict them from selling their brands online, it’s difficult to know which brands the stores have added.
T.J. Maxx and Marshall’s executives noted that TJX has gained access to many German and other European brands that they did not have a year ago. Many of those brands are flowing to North America just as American brands are flowing to its stores Europe.
“Our relationships in Europe are just at a very different level than theyve ever been,” said Herrman. “And Europe offers a number of new resources for us in the outerwear area that weve been already capitalizing on.”
TJX anticipates outerwear buying opportunities will improve in the weeks ahead as a slow down at West Coast ports causes some apparel shipments to land late. TJX was among many retail companies that attributed margin erosion in the third quarter to a decision to bring in holiday merchandise early to avoid such delays.
“Were going to yield a great opportunity from the goods that havent gotten through for most vendors and retailers as of yet,” said Meyrowitz.
To ensure it does not get stuck with too much outerwear, as it did when temperatures thawed last January, TJX continues to shift toward more frequent, smaller shipments to its stores. It has also increased the ratio of lower weight coats that are more appropriate for stores in the Sun Belt.
“I think our strategy is much better in terms of weather-proofing and where were shipping our goods,” said Meyrowitz.
