TJX reportedly puts Bob's Stores on the block
TJX Cos. is reportedly in discussion to sell its money-losing Bob's Stores.
In addition to Bob's, Framingham-based TJX operates T.J. Maxx, Marshalls, HomeGoods, and A.J. Wright in the United States, Winners and HomeSense stores in Canada, and T.K. Maxx stores in Europe.
TJX, which has benefited as shoppers look for cheaper alternatives, posted a nearly 20 percent profit gain on a 6 percent increase in sales in its first quarter ended April 26. The bulk of its sales come from TJ Maxx and Marshalls. But Bob's Stores, which was acquired in bankruptcy in 2003, remains in a slump.
For the first quarter, Bob's Stores posted a 3 percent decline in same-store sales, compared with a 3 percent gain in same-store sales at T.J. Maxx and Marshalls. Same-stores sales, or sales at stores opened at least a year, are considered a key indicator of a retailer's health
According to the report, which cites anonymous sources, potential buyers for Bob's include private equity firm Versa Capital Management Inc. The report said TJX's adviser Peter J. Solomon Co. is seeking a buyer that will keep Bob's 34 stores open.
Sherry Lang, a company spokeswoman at TJX, declined to comment, as did officials at Peter J. Solomon. Officials at Versa Capital could not immediately be reached for comment.
Mark Montagna, an analyst at CL King & Associates, wrote in a report published today that the sale of Bob's would be a positive since it would eliminate a distraction for management.
"Given TJX is a growth company, it makes the most sense for senior management to focus on the other 98 percent of the business that operates under growth concepts," he wrote.
Still, Montagna noted that given "Bob's small impact to sales and profits," the sale wouldn't have "a long-lasting impact on TJX's shares." Montagna noted that it's difficult to gauge the proceeds from a sale because regional department stores are struggling or filing for bankruptcy. He cited Goody's Family Clothing Inc.'s bankruptcy filing, and the woes of Mervyns LLC, whose suppliers are now holding off on shipments.
TJX's shares slipped 1 percent to $32.41 in midday trading on the New York Stock Exchange. (AP)
