TJX still in love with HomeGoods
By Staff -- Home Textiles Today, 5/19/2003 12:00:00 AM
FRAMINGHAM, MA —
HomeGoods continues to be a standout performer for TJX Cos. Driven by new-store openings, total sales rose 17 percent, while segment profit increased 12 percent, Ted English, president and ceo said during the company's first quarter conference call last week.
Comparable store sales for the division were decidedly more sluggish, falling by 1 percent, he reported, reflecting the overall anemic retail environment.
Yet, the company remains bullish on the home division and its retail businesses in general. English forecast same-store sales at HomeGoods will rise by 5 percent in May, 5 percent in June, 6 percent in July, for a second quarter comp-stores increase of 5 percent.
Home merchandise, reflected in HomeGoods, as well as in T.J. Maxx, Marshalls and other divisions, represents about 20 percent of TJX's total business, the company stated. Moreover, English said that it turns "as fast or faster than apparel."
Lower than expected sales combined with exceptional opportunistic buys during the quarter resulted in ballooning inventories for the retailer, sending them up 16 percent.
However, English defended the position, stating that they were a necessary part of the company's business plan and had contributed to above-average margins. Moreover, it's enabled the merchant to work closer in-season than usual, he said.
"Business has been tough out there, and vendors have released inventories earlier than they would have [typically]," English said.
He argued that while inventories were higher total commitments were in-line and the company's open-to-buy was in "great shape."
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