TK Maxx owner endures net loss of £160m as sales slow down

TK Maxx TJX Companies Ernie Herrman covid-19 lockdown

TK Maxx owner has revealed a net loss of $214.2 million (£160.8 million) in its second quarter as the company continued to struggle with trading since the Covid-19 lockdown.

In the three month period ending August 1, TJX UK said net sales were better than expected and reached $6.67 billion (£5 billion) compared to $9.78 billion (£7.34 billion) in the same period last year.

“For the quarter, we were very pleased that both our top and bottom lines well exceeded our internal plans, despite our stores only being open for a little more than two thirds of the second quarter, and that our merchandise margin was excellent,” TJX chief executive and president Ernie Herrman said.

“Further, we saw especially strong sales at our HomeGoods and Homesense chains, as well as the home departments within our other chains, across geographies.”

Meanwhile, the company’s 4500 stores have now reopened after the Covid-19 lockdowns.

TJX said it experienced “very strong” sales across all of its retail banners and countries when stores first reopened.

However, sales began to slow down and the company is now expecting sales in reopened stores to drop by 10 per cent to 20 per cent in its third quarter.

“As to the future, we are confident that when more customers are comfortable with in-store shopping, we will be in a great position to continue gaining market share as we have for many years,” Herrman said.

“We have been a trusted, value leader for more than 40 years, and we see a long runway of successful growth ahead for TJX.”

Earlier this year, TJX UK, had complained about a trading name used by a branch of Mike Ashley’s Frasers Group retail empire.

TJX sued a firm within Frasers Group, Sportsdirect.com Retail Ltd, and complained about a “designer outlet business” called Brand Max, which trades from 18 stores across the UK and Ireland and sells a range of clothing and homeware at discounts of up to 70 per cent.

However, in June, Ashley and bosses at TK Maxx reached a settlement.

Lawyers had told a judge that the TX Maxx brand had trademark protection and they said Brand Max could cause confusion.

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