Slow traffic. Store closures. Chain bankruptcies. This litany of bad news has dominated the headlines recently.
But today, TJX announced it would be rolling out a new store format. And it’s no surprise that this bullish move is coming from the off-price market, since it’s often been the one bright spot at retail. Moody’s predicts market share for the off-price sector will grow to 10 percent of apparel sales by 2018, up from 8.8 percent in 2015.
But if TJX is successful in its grab for market share, it will have to come from somewhere. Full-line department stores, which all offer at least a limited selection of home products, should beware.
The company, which already operates its namesake chain, Marshall’s and HomeGoods—the latter of which boasts an almost cult-like following–is developing a new home décor format, according to TJX CEO Ernie Herrman.
Similar to the positioning of TJ Maxx and Marshall’s in the marketplace, the new store—which doesn’t have a name yet—will be designed to complement not cannibalize HomeGoods’ sales.
In the company’s latest earnings report, it announced comp store sales increased 6 percent in HomeGoods stores in fiscal year 2017. Net sales were $4.4 billion for the same period, compared to $3.9 billion for the previous year.
“While we are proud to have grown our HomeGoods customer base for many years, we believe we remain significantly underpenetrated in total U.S. home market and enormous opportunity remains for us to grow market share in this space. Our customers are passionate about home goods and we are confident they will love our new home concept, too,” Herrman said.
In addition to the launch, the company also intends to boost its fleet of HomeGoods stores from 579 to 659.
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