An Insight into the Store Growth Plans of Off-Price Retailers



Increasing competition

The consistent performances of off-price retailers such as TJX Companies (TJX) have been attracting more and more competitors to the off-price space. In 2015, department store chain Macy’s (M) made its debut in the off-price space through its Macy’s Backstage stores. Kohl’s (KSS) opened its first Off-Aisle store in 2015.

Pure-play off-price retailers such as TJX Companies, Ross Stores (ROST), and Burlington Stores (BURL) have aggressive store growth expansion plans that will further strengthen their positions.

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New stores in 1Q16

In 1Q16, TJX Companies operated 3,661 stores, including 2,715 stores in the United States, 399 stores in Canada, 512 stores in Europe, and 35 stores in Australia. The company opened 47 stores in 1Q16.

As of the end of 1Q16, Ross Stores operated 1,473 stores in the United States, including 1,295 Ross Dress for Less stores and 178 dd’s Discounts stores. In 1Q16, Ross Stores opened 22 new Ross Dress for Less stores and six dd’s Discounts stores.

The company expects to add 90 new locations in fiscal 2016, including 70 Ross Dress for Less stores and 20 dd’s Discounts stores. The company plans to close or relocate about ten older stores during the year.

In 1Q16, Burlington Stores opened six new stores under the Burlington Stores brand and closed two MJM Stores and one Burlington Store. As of the end of 1Q16, the retailer was operating 569 physical stores.

High-end department store Nordstrom (JWN) operated 329 stores as of the end of 1Q16, including 200 off-price Nordstrom Rack stores.

Long-term growth plans

TJX Companies aims to expand its store base by over 50% to 5,600 stores in the long term. In 2015, the company extended its global reach to three new countries: Austria, the Netherlands, and Australia. The company entered the Australian market through the acquisition of off-price retailer Trade Secret. The iShares Russell Top 200 Growth ETF (IWY) has 0.7% exposure to TJX Companies.

Over the long-term, Ross Stores expects to grow its Ross Dress for Less stores to 2,000 locations and its dd’s Discounts chain to 500 stores. Burlington Stores’ goal is to open about 25 net new stores annually, with an aim to reach 1,000 locations.

We’ll discuss analysts’ recommendations for off-price retailers in the next part of this series.


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