TJ Maxx 2014 Annual Report Download - page 20

TJX EUROPE:
Our TJX Europe division operates the T.K. Maxx and HomeSense chains in Europe. Launched in 1994, T.K.
Maxx introduced off-price retail to Europe and remains Europe’s only major brick-and-mortar off-price
retailer of apparel and home fashions. With 407 stores, T.K. Maxx operates in the U.K., Ireland, Germany
and Poland. At the beginning of fiscal 2016, we opened our first store in Austria. Through its stores and its
e-commerce website for the U.K., tkmaxx.com, T.K. Maxx offers a merchandise mix similar to T.J. Maxx,
Marshalls and Winners. We brought the off-price home fashions concept to Europe, opening HomeSense in
the U.K. in 2008. Its 33 stores in the U.K. offer a merchandise mix of home fashions similar to that of
HomeGoods in the U.S. and HomeSense in Canada.
In addition to our four major divisions, we operate Sierra Trading Post, acquired in 2012, a leading off-price
Internet retailer of brand name and quality outdoor gear, family apparel and footwear, sporting goods and home
fashions. Sierra Trading Post launched its e-commerce site, sierratradingpost.com, in 1998 and operates six
retail stores in the U.S.
Flexible Business Model. Our flexible off-price business model, including our opportunistic buying,
inventory management, logistics and store layouts, is designed to deliver our customers a compelling value
proposition of fashionable, quality, brand name and designer merchandise at excellent values. Our buying and
inventory management strategies give us flexibility to adjust our merchandise assortments more frequently than
traditional retailers, and the design and operation of our stores and distribution centers support this flexibility.
Our merchants have more visibility into consumer, fashion and market trends and pricing when we buy closer to
need, which can help us “buy smarter” and reduce our markdown exposure. Our selling floor space is flexible,
without walls between departments and largely free of permanent fixtures, so we can easily expand and contract
departments to accommodate the merchandise we purchase. Our logistics and distribution operations are
designed to support our buying strategies and to facilitate quick, efficient and differentiated delivery of
merchandise to our stores, with a goal of getting the right merchandise to the right stores at the right times.
Opportunistic Buying. As an off-price retailer, our buying practices, which we refer to as opportunistic
buying, differentiate us from traditional retailers. Our overall buying strategy is to acquire merchandise on an
ongoing basis that will enable us to offer a desirable and rapidly changing mix of branded, designer and other
quality merchandise in our stores at prices below regular prices for comparable merchandise at department and
specialty stores. We seek out and select merchandise from the broad range of opportunities in the marketplace
to achieve this end. Our buying organization, which numbers more than 1,000 Associates in 13 buying offices in
ten countries, executes this opportunistic buying strategy in a variety of ways, depending on market conditions
and other factors.
We take advantage of opportunities to acquire merchandise at substantial discounts that regularly arise from the
production and flow of inventory in the apparel and home fashions marketplace, which include, among others, order
cancellations, manufacturer overruns, closeouts and special production direct from brands and factories. Our buying
strategies are intentionally flexible to allow us to react to frequently changing opportunities and trends in the market
and to adjust how and what we source as well as when we source it. Our goal is to operate with lean inventory levels
compared to conventional retailers to give us the flexibility to seek out and to take advantage of these opportunities
as they arise. In contrast to traditional retailers, which tend to order most of their goods far in advance of the time the
product appears on the selling floor, our merchants remain in the marketplace throughout the year, frequently looking
for opportunities to buy merchandise. We buy much of our merchandise for the current or immediately upcoming
selling season. We also buy some merchandise that is available in the market with the intention of storing it for sale,
typically in future selling seasons. We generally make these purchases, referred to as packaway, in response to
opportunities in the marketplace to buy merchandise that we believe has the right combination of brand, fashion,
price and quality to supplement the product we expect to be available to purchase later for those future seasons. We
also acquire some merchandise that we offer under in-house brands or brands that are licensed to us. We develop
some of this merchandise ourselves in order to supplement the depth of, or fill gaps in, our expected merchandise
assortment.
Our expansive vendor universe, which is in excess of 17,000, consists primarily of manufacturers along with
retailers and other vendors, and provides us substantial and diversified access to merchandise. We have not
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