TK Maxx bucks gloomy trend among retailers

  • TK Maxx bucks gloomy trend among retailers
    Independent.t. E.
    If you have a great fondness for Department stores, be careful what you read these days. For many months now the Newspapers have been full of more tales of Woe, comes especially from the British retail sector.
    https://www.independent.ie/business/personal-finance/tk-maxx-bucks-the-trend-among-gloomy-retailers-37254589.html
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If you have a great fondness for Department stores, be careful what you read these days. For many months now the Newspapers have been full of more tales of Woe, comes especially from the British retail sector.

The ‘rescue’ house of Fraser is just the latest news from beleaguered sector that is struggling to come to grips with the impact of the Internet. But, like most people, the grandmother wisely said at the time: “God never closes one door, he opens another.”

Those customers that leave luxury goods counters in the old high-street shops are flocking to stores where the same (well, similar) luxury brands sell at a discount.

Our company this week, the us group TJX, the owner of TK Maxx, has been at the forefront of this trend.

Founded in the 1970s, it is the holding company for several retail chains and online stores.

TJX has thrived and was a good investment. She sells clothes, shoes, jewelry and home goods from 20pc to 60pc below full price.

Last year, customers ‘treasures’ on clothing and footwear accounted for 53pc of sales. Jewelry and accessories 15pcs of turnover, while home products accounted for 33pc.

Business model value TJX operates. Since opening its first store in Framingham, Massachusetts, 41 years ago, the year nothing will be able to increase your income.

Today it has more than 4,000 stores across three continents, employs more than a quarter-million people.

It has a market value of $67bn (€57.6 billion), sales of $36 billion, net profit of $2.6 billion and was ranked 85 among the top Fortune 500 companies.

Search of discounted products is critical for TJX. To achieve this, it has more than 1000 customers all over the world dealing with 20 000 companies in 100 countries on four continents.

Their customers to take advantage of opportunities as they arise and keep a close eye on cancellations, production, overproduction, fashion of last years designer or brand closures.

USA is the largest and most profitable division, with sales of $22 billion and operating profit of $2.9 billion.

The business has 2,300 stores for retail trade chains like TJ Maxx and Marshall’s. Sales in the last year of his home 670 trading transactions exceeded $5 billion for the first time and get a profit of nearly $ 1 million on the store.

The canadian operations are much smaller than us, with 450 retail outlets, but also shows the highest profit of $1.2 million for the store.

The international segment of the group is Europe and, recently, Australia.

Europe accounts for 95pc of the business. He trades as TK Maxx in six European countries, including Ireland. Its 520 stores has allocated $5bn to a group of sales, but the profit of $250 disappointed.

In the group there have been some interesting trends. Net sales increased by $2 billion annually over the past five years and net profit shows the same trend, increasing by $0.2 billion a year over the same period. These results were caused by more than 200 additional brick-and-mortar stores every year.

It should apply to competitors that the company plans to increase its size to store up to 6000.

Surprisingly, its e-Commerce represents less than 2pc of group sales, but, according to the company, this is an important addition to its retail outlets.

TJX has a healthy balance sheet and one of the best rating (b+) in the retail sector. Its share price at $106, this is just below its year high and shows an increase of more than 50pc in a year.

The group also made $3 billion in cash from operations, has a price earnings multiple of 25 and earnings per share of $4.

Tax cuts US President Donald trump become useful for the company, which used them to increase their dividends and share buybacks. But then a group committed to increasing the dividend and doing it for more than two decades.

However, although the group and its brand and will continue to be successful and share attractive, I would still worry about online breakdown in the long term.

 

Nothing in this article shall not be construed as a recommendation, Express or implied, to purchase any of the shares.

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