TJX To Begin E-Commerce Launch This Fall
TJX Cos. has alluded to a planned launch of a new e-commerce site for its off-price retail brands, including Marshalls, TJ Maxx and HomeGoods, a number of times over the last year. But it seems the Framingham-based company, which raked in higher-than-expected revenue in its most recent quarter, is taking a measured approach.
A spokeswoman for TJX said the company is not speaking about its e-commerce strategy outside of earnings statements and calls. In an Aug. 20 earnings call, CEO Carol Meyrowitz expressed enthusiasm for the looming launch of a TJ Maxx website late this fall, and e-commerce plans in general.
Meyrowitz: E-Commerce Approach 'Deliberate'
The TJ Maxx site will be launched in a “controlled mode” to start, according to Meyrowitz. She said the company is taking a “deliberate” approach to making discount apparel and housewares available to online shoppers.
“We plan to do e-commerce profitably and most importantly, not disappoint our customers,” Meyrowitz said. “'Grow smart' is our motto.”
This is the second e-commerce venture for TJX. The company launched an e-commerce website under a former CEO in 2005, but sales were poor and the company shed the site after just one year.
Jaime Katz, an analyst who covers TJX for Chicago-based Morningstar Inc., said the company wants to avoid another failed attempt, so it's taking a careful look at the logistics of online selling ahead of a full-fledged launch.
Because of the way TJX buys merchandise – some at the beginning of the season, some in the middle – Katz said it may be challenging for the company to know it has enough inventory at a given time to advertise it for sale online. Plus, figuring out the website interface that's easy to navigate may be difficult for a retailer like TJX that sells a variety of products, Katz said.
“How do you want the interface to look? How do you want people to interact with the site?” Katz said. “I think that becomes slightly more complicated when you're dealing with a multi-category retailer and you're not really sure too far out what the inventory is going to be.”
Sierra Aids With E-Commerce Launch
To aid its e-commerce entrance, TJX acquired Wyoming-based Sierra Trading Post, an off-price Internet retailer, in December 2012 for $200 million. Sierra is now helping TJX launch sites for its other brands, according to the company.
Meyrowitz said on Aug. 20 that there is potential for the company, which is already a market leader in off-price retail, to grow its customer base by reaching people who want to shop only online. But she pointed out that TJX has done just fine without an e-commerce operation to date. The company's sales for the first half of fiscal 2014 were $12.6 billion, an 8-percent increase over last year, and they also grew 8 percent in the second quarter compared to last year, totaling $6.4 billion. These higher-than-expected numbers prompted TJX to raise its earnings guidance to between $2.74 and $2.80 per share, up from $2.55 in fiscal 2013.
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