TJX divestment of Russia retail chain cost $218M

Photo/Grant Welker TJX's Framingham headquarters

Write a Comment

By Alexander MacDougall

Framingham-based TJX Cos. announced in its first quarterly report for the fiscal year the full cost of its divestment from Familia, a Luxembourg-based retailer with considerable operations in Russia.

The company had acquired a minority ownership stake of the company in the 2020 fiscal year, according to TJX’s filing with the U.S. Securities & Exchange Commission. The company said the divestment was in response to Russia’s ongoing invasion of Ukraine.

According to TJX’s quarterly report, the divestment cost the company $218 million, or around $0.19 a share.

“Given the lack of an active market or observable inputs, the Company derived an exit price which indicated that this investment had no market value,” the report reads. “The Company recorded a $218 million charge in the first quarter of fiscal 2023 which represents the entirety of its investment.”

In addition to its retail operations in the United States, TJX also has operations in Europe, where stores operate under the TK Maxx brand.

The sale also resulted in a higher income tax rate for TJX, which was 31.1% for the quarter, a 5% from last year’s Q1.

It was previously announced that TJX executives Doug Mizzi and Scott Goldenberg had resigned from the board of Familia.

With the divestment, TJX joins a litany of other companies that have divested or shuttered operations in Russia in response to the war in Ukraine. A notable exception is fellow Massachusetts-company IPG Photonics, which continues to have considerable operations in Russia.