As shoppers continue to flee department stores, more often than not they are running straight into the arms — and aisles — of off-price giant TJX Companies.
TJX, which runs the TJ Maxx, Marshalls and HomeGoods chains, remains among the bright lights of retail — seemingly picking up more than its fair share of the customers no longer shopping full-line department stores.
The Framingham, Mass., retailer’s 3,913 stores reported on Tuesday a 6 percent rise in second-quarter revenue — and a Herculean 3 percent gain in same-store sales, defying the malaise gripping the industry.
Profits rose slightly, to $553 million.
Customer traffic also grew in the quarter, driving the sales increases in its stores, executives said on an analyst call on Tuesday, although they did not disclose the traffic growth.
“Driving market share has been a key focus,” said Chief Executive and President Ernie Herrman, who boasted about the company’s easy access to prime merchandise these days.
Where many designer brands, including Michael Kors, Ralph Lauren, Coach and Vince, have been pulling back from department stores, Hermann said on the call, “We have not experienced the cutback from our major brands, and if anything, we are having to manage our flow and buying pattern to not buy too much too soon.”
TJX buys much of its inventory directly from brands and from factories — and a smaller percentage, between 10 and 15 percent, from department stores, according to Craig Johnson, president of Customer Growth Partners.
“The off-price industry started decades ago mostly by getting excess, liquidated inventory from the department stores, but that model has since flipped as TJX expanded its vendor base,” Johnson said.
TJX works with 18,000 vendors, according to the company.
In March, Macy’s chief financial officer said off-price retailers were Macy’s biggest threat — not Amazon or online shopping in general. Macy’s customer traffic declined 5.5 percent in the second quarter.
“TJX’s ability to keep growing traffic is a meaningful stand-out in this retail dissolution,” said Nomura-Instinet analyst Simeon Siegel. “In a sense, the off-price sector is becoming the new department stores.”
About half of TJX’s revenues now comes from non-apparel.
TJX’s shares closed up 54 cents, to $70.16.