TJ Maxx 2006 Annual Report Download - page 9

categories and other merchandise initiatives, and
believe that our new marketing campaign will
continue to build greater customer awareness of the
HomeGoods brand. In 2007, we plan to net 12 addi-
tional stores at HomeGoods, bringing the chain to a
total of 282 stores by year-end.
Repositioning A.J. Wright
We repositioned our A.J. Wright business in 2006,
which we believe puts this business on a much
better platform to achieve successful growth. We
closed 34 underperforming stores, which we believe
was necessary for the future success of A.J. Wright.
Narrowing our geographic scope allows us to focus on
the demographic profile that we believe works best for
this concept and also gain advertising leverage. We
currently operate A.J. Wright stores in 19 states, and
believe that the strong results of our new stores in 2006
underscores our better understanding of this business
and its moderate-income target customer demographic.
We have strengthened the organization, naming a
new President in Celia Clancy, who brings 25 years of
merchandising experience and a strong understand-
ing of this customer base, and adding other senior
management with decades of TJX experience in the
operating, merchandising, and marketing arenas. We
begin a new year focused on capitalizing upon what
we have already learned about this moderate-income
customer, and with its very sizable target demographic,
continue to view A.J. Wright as a great potential
growth vehicle for TJX. In 2007, we expect A.J. Wright
to be cash-flow positive again, and we plan to continue
growing this chain at a measured pace, with five new
store openings planned in existing markets.
Progress at Bob’s Stores
We took significant steps to improve performance at
Bob’s Stores in 2006. We ended the year just short of
our goal of reducing operating losses by half, and
believe we would have met our target were it not for
the unusually warm weather in the fourth quarter
throughout the Northeastern U.S., where Bob’s Stores
is concentrated. During the year, we expanded our
women’s casual sportswear departments to encourage
our female customers to shop Bob’s Stores for herself,
and saw positive results. We also succeeded in increas-
ing promotional levels, which drove customer traffic,
while increasing merchandise margins. In 2007, our
focus remains on improving performance at our exist-
ing stores, with no new store openings planned until
we see this business produce comparable store sales
increases that meet our expectations. We expect Bob’s
Stores to be cash-flow positive in 2007.
Computer Systems Breach
In January 2007, we announced an unauthorized
intrusion of our computer systems that process and
store information related to customer transactions,
detailed in our Form 10-K. We deeply regret any
difficulties our customers may experience as a result
of this breach. As we have always done, we have
made our customers our top priority in dealing with
this issue and we have dedicated significant human
and financial resources to protect personal data, as
well as communicate with customers about this
problem. We have also communicated in a timely
manner to the credit and debit card companies, as
well as governmental and law enforcement agencies.
We are working with leading computer security
firms on this issue and we want our shareholders and
customers to know that we believe that it is safe for
customers to shop our stores.
In the fourth quarter of fiscal 2007, we
recorded a charge of approximately $.01 per share for
costs related to the breach incurred in that quarter,
including costs for investigating and containing the
intrusion, enhancing computer security, communi-
cating with our customers, as well as technical, legal
and other fees. We expect to continue to incur addi-
tional expenses such as these over the coming
months, but are not in a position to reasonably
estimate the amounts at this time. Also, we
do not yet have enough information to reason-
ably estimate losses we may incur arising from the
intrusion(s). We will continue to report on
this matter periodically.
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