Making a better bargain
TJX didn't scrimp in the downturn, earning customer loyalty
TJX Cos. ruled the Globe 100 list in 2009, when the recession made discount shopping a necessity.
In 2010, the Framingham retailer helped turn bargain-hunting into a cool adventure, with an expanding assortment of trendy fashions, videos of YouTube sensations ravaging the stores, and a new shopping vernacular that includes catchy words like Maxxinista.
And so TJX, which runs popular chains T.J. Maxx, Marshalls, and HomeGoods, has turned up again this year as the best-performing consumer company on the Globe 100 list. Revenue at the company rose 8.2 percent to $21.94 billion in 2010, and its profit margin increased 2.3 percent.
In the thick of the recession, TJX didn’t retrench like other retailers. Instead, the company opened new stores, added more vendors, reduced inventory, and took other cost-cutting measures. TJX chief executive Carol Meyrowitz said the merchant continued these strategies in 2010, and also ramped up its marketing initiatives and store makeovers.
“We continue to gain a lot of new customers, and we want them to have a great shopping experience in our stores when they try us out,’’ Meyrowitz said.
Daniel Hofkin, an analyst with William Blair & Co., said TJX has made the most of its national advertising campaign, promoting both the Marshalls and T.J. Maxx brands by cleverly communicating the appeal of off-price shopping.
“It definitely seems to have resonated with consumers,’’ he said.
Hofkin said the company has also been successful at adding about 2,000 vendors in 2010. With 14,000 vendors worldwide, TJX can change its assortment more frequently and be more selective.
“Part of the whole appeal is the treasure hunt,’’ Hofkin said.
TJX also made some bold decisions in 2010. The company revealed plans to bring the Marshalls chain to Canada — which could eventually add 90 to 100 stores there.
Last December, the retailer also disclosed plans to abruptly shutter its entire A.J. Wright chain and convert some of those stores into other TJX brands. The decision resulted in thousands of layoffs nationwide, including roughly 1,400 in Massachusetts.
“Although the decision to consolidate A.J. Wright was made difficult because of the number of associates that were impacted, it was the right thing to do for the company as a whole,’’ Meyrowitz said.
The biggest challenge last year, she said, was keeping such a large company focused on its off-price mission as it grew.
“In 2010, we expanded in Europe a bit too quickly,’’ Meyrowitz said. “We’re working hard to get this great business back on track, and believe we’ll begin to see progress at the half-year mark this year. Long term, we’re as confident as ever that Europe holds great potential for us.’’
Beyond Europe, she sees a healthy and vibrant future for the off-price industry.
“Value is not going out of style any time soon,’’ Meyrowitz said.
Jenn Abelson can be reached at firstname.lastname@example.org.