Op-Ed | Not Even T.J. Maxx Is Immune to Retail’s Woes

NEW YORK, United States — Even retail’s candy spot is popping bitter.

TJX Cos., the operator of TJ Maxx and Dwelling Items shops, on Tuesday reported first-quarter gross sales that fell wanting forecasts. This stunned analysts who had anticipated the off-price chain to defy the struggles of the broader retail trade. Shares fell 5 % in response to the corporate’s first gross sales miss for the reason that first quarter of 2014.

Buyers could also be overreacting to what’s going to possible be a short-term blip. In any case, TJX’s gross sales and earnings are nonetheless rising, which is greater than conventional department shops can say. And the current rash of retailer closings — accompanied by liquidation gross sales and reductions at struggling chains akin to J.C. Penney Co. Inc. and Sears Holdings Co. — possible ratcheted up the competitors for TJ Maxx’s low cost clothes and niknaks enterprise.

However what if the concerns are justified?

TJ Maxx, together with different off-price operators akin to Nordstrom Inc.’s Rack shops and Ross Shops Inc., have been stealing market share from department shops for years by providing trend labels and residential items at discounted costs.

However now, department shops akin to Macy’s Inc., Kohl’s Corp. and Hudson’s Bay Co. are entering into the off-price recreation with their very own variations of low cost choices. Higher late than by no means, I assume, for them. But it surely’s one thing TJX ought to take very severely.

In the meantime, it is getting more and more simpler to search out designer names akin to Tory Burch and Rebecca Minkoff on Amazon.com and different web sites, giving buyers much less cause to go to TJ Maxx to seek for their favorite manufacturers. And identify manufacturers are getting tougher to search out there, anyway, as Ralph Lauren Corp. and others pare gross sales to off-price retailers to shore up their luxurious cache.

Maybe that is partly why year-over-year gross sales have declined at Nordstrom Rack in 4 of the previous six quarters.

And as TJX retains constructing extra shops, it dangers additional cannibalising gross sales at its present retailer base.

Somewhat than providing plans to handle the elements behind its disappointing quarter, TJX executives on the earnings name resorted to the age-old bad-weather excuse, saying a gross sales rebound began in April and continued into Could.

Consideration, all retail executives: It is by no means good in charge the climate. And if gross sales progress within the present quarter is progressing as effectively as executives described Tuesday, then why would gross sales steering for the following quarter stay so muted. at 1 % to 2 % progress from the yr earlier than.

Whether or not this can be a one-time flub or TJX succumbing to what’s afflicting the remainder of America’s retailers, this can be a good reminder that retail strikes quick, shoppers are fickle, and even one of the best operators cannot relaxation on their laurels.

By Shelly Banjo; editor: Mark Gongloff.