TJX Companies is adding new countries to its treasure-hunting map — looking to further boost business outside its strong U.S. marketplace. The Massachusetts-based owner of T.J. Maxx and Marshalls announced a pair of international endeavors this summer: a joint venture with Mexico’s Grupo Axo and an investment in Dubai-based Brands for Less. These moves add to TJX’s existing global presence — spread across Canada, six European countries including the U.K., and Germany, and Australia — and advance its larger plan to capitalize on the worldwide growth of off-price retail. The industry has boomed in recent years, taking market share from traditional department stores and appealing to inflation-wary consumers in the U.S. and abroad. TJX executives, in particular, have worked to create what they call a “treasure hunt” feel to stores to keep customers coming back for more. With these moves, TJX is “planting seeds in the regions as part of their long-term goal to have a global footprint in off-price,” Citi analyst Paul Lejuez said in a recent CNBC interview. The Grupo Axo partnership and Brands for Less investment were both somewhat unexpected on Wall Street when they were announced in early June and August, respectively. But internally, TJX felt the time was ripe, CEO Ernie Herrman said on TJX’s Aug. 21 earnings call . That’s due, according to Herrman, to the company amassing enough talented employees to commit to the expansion initiatives with “the right replacement” waiting in the wings. A couple of years ago, Herrman said he would have been “reticent to pull from the core business.” But now, he feels the company is able, in his words, “to take advantage of expanding globally in a manner that has really no risk to the core.” A major area of expertise that TJX’s employees can bring its new partners: close relationships with vendors to ensure its stores are stocked with clothes, home decor, and other things people want to buy. TJX wants to apply its “secret sauce merchandising talent” to sweeten its investment, Herrman said when discussing Brands for Less, specifically. “We can afford to have people be involved to help them, which helps them and it helps our investment.” Scale works in TJX’s favor, Lejuez said. “Being the one global player in off-price does give them a lot of advantages with the vendor community,” creating multiple pipelines to sell products across the U.S., Canada, Europe and Australia, the Citi analyst said. “Add Mexico and the Middle East into the mix, it gives them more options.” Burlington Stores and Ross Stores are TJX’s two main domestic competitors. TJX invested $360 million for a 35% stake in Brands for Less, which has more than 100 stores primarily located in the United Arab Emirates and Saudi Arabia. TJX said the investment will start benefiting earnings in its next fiscal year, which begins in February 2025. Its first move of the summer was inking a joint venture with diversified retailer Grupo Axo. Under the…
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