TJX CEO ‘bullish’ on home

Home accounts for more than one-third of Marmaxx business, said Ernie Herrman. The off-price retailer is planning for significant long-term store growth.

FRAMINGHAM, Mass. – TJX Cos. is optimistic about store expansion and is jacking up the tally for long-term store growth.

The company has now hiked its outlook for total store locations up to 7,000 units – which represents 1,900 more stores than it currently operates in the U.S. and elsewhere.

The long-term market opportunity for HomeGoods stores is now 1,800 locations, up 300 units from the previous outlook. If things go to plan, HomeGoods will one day operate more locations than the legacy Bed Bath & Beyond chain had at its peak, which was just over 1,500 stores. As of Feb. 1, HomeGoods operated 943 stores.

“The business I continue to be bullish on is home,” said Ernie Herrman, CEO and president of TJX.

In addition to the growth coming from HomeGoods – which generated a full-year comp increase of 4% – home also accounts for more than one-third of the U.S. Marmaxx business, he noted.

“If new housing starts and interest rates change to be more favorable, there’s even more upside,” he said.

As other retailers either have pared down their store portfolio or gone out of business, HomeGoods and Marmaxx have been picking up market share – especially in home. That’s been true whether the vacated stores were home-only or also carried home in their broader mix.

“I think our home business, the way we’re tracking, is probably one of the most profitable home businesses in the county,” Herrman told investors during this morning’s fourth quarter review call.

TJX is now weighing rural areas where it can fill the void after local department stores shut down. Within its typical trading areas, it is examining locations where big box retailers have gone dark – either as an opportunity to add a new store or to relocate an existing unit the market.

For the current fiscal year, TJX plans to open 130 net new stores and will remodel roughly 500 stores. Plans for net new units include: