Business Insider/Mary Hanbury
- The CEO of TJX Companies — the retail giant behind TJ Maxx, Marshalls, and HomeGoods — said in a recent earnings call that these brands could benefit from President Donald Trump’s proposed round of tariffs on $300 billion worth of Chinese goods.
- This is because consumers may flock to budget stores if other retailers are forced to raise their prices.
- TJX Companies reported strong earnings for the first quarter of fiscal 2020 on Tuesday.
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TJ Maxx and Marshalls are preparing to benefit from tariffs.
In a call with investors on Tuesday, the CEO of TJX Companies — the retail giant behind TJ Maxx, Marshalls, and HomeGoods — said that while the company is closely monitoring the negative impact of tariffs, they could also create some opportunity for the company.
Historically, off-price brands have benefited from "disruptions in the market," TJX CEO Ernie Herrman said.
In this case, Herrman said that if tariffs are imposed on another $300 billion worth of Chinese goods and retailers are forced to raise prices to cover the costs, shoppers could flock to off-price stores for value.
"There’s a lag, but there is a silver lining for us," he said.
Read more: We shopped at TJ Maxx and Ross to see which was a better discount store — and the winner was clear
TJX Companies reported strong first-quarter earnings for fiscal 2020 on Tuesday. Same-store sales were up 5% overall for the company, and they were up 6% for its TJ Maxx and Marshalls brands.
Meanwhile, JCPenney and Kohl’s, which also reported earnings on Tuesday, saw same-store sales drop by 5.5% and 3.4%, respectively.
Discount stores such as TJ Maxx and Ross Stores are known as one of the few bright spots in retail. These stores have been benefiting from a disappearing middle class and a higher demand for budget options — two factors that have been hurting department stores.
TJ Maxx has also been able to avoid the effects of declining foot traffic to shopping malls as most of its stores are located in suburban strip malls rather than enclosed shopping malls.
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See Also:
- Urban Outfitters is launching a new clothing rental service, and it’s just the latest sign that fast fashion as we know it is dying
- More than 7,000 stores are closing in 2019 as the retail apocalypse drags on — here’s the full list
- China tariffs could trigger one of the biggest waves of store closures the US has ever seen, sparking the second coming of the retail apocalypse
Source: Business Insider – feedback@businessinsider.com (Mary Hanbury)