"We believe that by closing these underperforming stores, we are making A.J. Wright a stronger business, and putting it in a substantially better position for further growth," said Sherry Lang, vice president of investor and public relations, in the November sales call. "A.J. Wright continues to hold great promise."
The move will allow TJX to better leverage advertising dollars off a smaller geographic base, achieve greater operational efficiency, and focus management on the better-performing units, Lang said. The stores to be closed represent approximately 21% of A.J. Wright's store base, but only 16% of its year-to-date sales, the chain said, and are "significantly" less profitable than the rest of the chain.
Lang declined to specify the locations of the stores to be closed, because associates were still being notified. Some employees will be offered positions with other TJX units, she said.
Companywide sales for the four-week period ended November 25, 2006, were $1.6 billion, up 7% over November 2005. Comp-store sales rose 3%.
The comp sales numbers are in line with the industry as a whole. Without the artificial boost of post-hurricane season sales, and hurt by tough comparisons with 2005 and warm weather, retailers' same-store sales inched up 2.1% year over year in November, according to the International Council of Shopping Centers. That figure includes a 0.5% slide by Wal-Mart's discount stores. Excluding Wal-Mart, chain same-store sales rose 4%, the report said.
TJX's year-to-date consolidated sales were $13.9 billion, a 9% increase from the previous year. Comparable store sales increased 4% from 2005. The closures are expected to lower year-end earnings by $37 million.
The TJX Companies operates 826 T.J. Maxx, 751 Marshalls, 271 HomeGoods, 162 A.J. Wright stores, and 36 Bob's Stores, in the United States, as well as 184 Winners and 68 HomeSense stores In Canada, and 212 T.K. Maxx stores in Europe.
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