TJX Companies, Inc
TJX, an international company, operates off-price retail stores offering apparel and home
furnishings. The company, which employed about 179,000 people as of 2013, has four
segments: Marmaxx, HomeGoods, TJX Europe, and TJX Canada. The revenue was
recorded of $26,123.8 million dollars in 2013, an increase of 12.1% over 2012. The
operating profit of the company was an increase of 25.9% over 2012. The net profit was an
increase of 27.4% over 2012.
TJX operates the business under off-price retailing strategy. It offers designed family
apparel and home furnishing at lower price compared with the regular deal. This business
model drives sales growth. T.J. Maxx and Marshalls, the subsidiaries, are the largest
off-price retail in the USA. Also, TJX introduce this business model to Canada and
Europe. Because of the economic downturn, TJX attracts new customers from all income
groups as it operates a business model which is highly focused on offering value to
customers. As a result, the company’s sales increased by 12.1% over 2012.
TJX’s operation model is well supported by its global sourcing and strong inventory
management. The company sources its merchandise globally from a vast vendor network.
A broad vendor base enables the company to stock its distribution centers avoiding
amassment of inventory. TJX currently turns in-store inventories as often as possible to
keep its inventory in line with the customer trends. TJX sees freshness of its inventory as a
key differentiator and so it makes efforts to ensure that shoppers will find fresh stock.
Faster inventory turns reduce operating costs and increase the profitability for the
company.
A low-cost structure has fueled profitability. The company aggressively controls costs
across its business operations. It designs stores, generally located in community shopping
centers, to provide a convenient shopping environment. However, TJX does not spend
heavily on store fixtures. The company’s efficient distribution network further aids in cost
control. TJX’s advertising budget as a percentage of sales, which is low compared to
traditional retailers, is improving operational cost structure has a beneficial effect on
profitability.
TJX operations are concentrated in the US. The company derived 76% of its revenues
from the US, whereas TJX derived 12.7% of its revenues from Europe and 11.3% from
Canada. The company’s concentrated operations increase its business risk associated with
adverse changes in the geo-political and socio-economic conditions of the region. In
addition, it limits TJX’s growth opportunities.
The company’s business is subject to regulations by several authorities regarding the
