TJX brands get lift from treasure hunt shoppers, but rival HBC lags

TORONTO TJX Companies Inc., owner of Winners and HomeSense, is one retailer that continues to defy the Amazon odds — it doesn’t sell its goods online or reveal its current lineup of goods on a website, but its performance is consistently strong.

The off-price retailer’s shares leaped seven per cent Wednesday after it posted another strong year of sales growth in Canada, up five per cent in the period ended Feb. 3.

That followed a robust 2016 where sales climbed eight per cent, and prompted the retailer to boost its long-term store growth estimates in the country to 600 from a previous target of 500. TJX has 454 stores across Canada.

“We are confident that our excellent merchandise and values will continue to resonate with Canadian shoppers,” chief executive Ernie Herrman told investors on an earnings call. He said customer traffic was up in all of the company’s divisions and was the primary driver behind same-store sales increases.

The news comes amid a general queasiness about the performance of mall-based retailers and in particular big-box stores, whose deep selection of goods has been mimicked by the “endless aisle” of the internet.

The off-price niche in which Framingham, Mass.-based TJX dominates with more than $35 billion in annual sales has been regarded as largely immune to weakening apparel and décor trends at bricks and mortar stores.

That hasn’t helped rival Hudson’s Bay Co., however, whose off-price business in the year ending January 2017 declined 7.4 per cent. Its financial results for the full year ended in January 2018 have not yet been released, but in the first three quarters of 2017, same-store sales in the off-price division fell 6.8 per cent, 2.3 per cent, and 7.6 per cent, respectively.

“TJX has cultivated a particularly loyal and specific shopper over the years,” says Jennifer Marley, a partner at Toronto-based retail advisory firm Sklar Wilton & Associates.

“The Winners shopper loves a treasure hunt and they have come to expect that — they have come to expect quality for less. It’s not unlike what consumers love about Costco.”

About a quarter of consumers enjoy the treasure hunt experience, she said.