TJX Cos. plans to cut 4,400 jobs as it converts 91 A.J. Wright stores into T.J. Maxx, Marshalls or HomeGoods stores and closes the brand’s remaining 71 locations.
The goal is to concentrate management and financial resources on larger, more profitable businesses, the Framingham, Massachusetts-based discount retailer said today in a statement. Almost half of the positions to be eliminated are part-time.
TJX anticipates that all 162 A.J. Wright stores, concentrated in the northeastern U.S., will be shut by mid- February, at a cost of about $150 million to $170 million, including asset impairment and severance expenses. The company said it expects that converting the 91 stores will take about eight weeks after the Wright closing.
T.J. Maxx and Marshalls attracted moderate-income shoppers during the recession, giving TJX confidence that those two chains can win sales from consumers who shopped at A.J. Wright, Chief Executive Officer Carol Meyrowitz told analysts today on a conference call.
“Management may want to focus its energy on the core businesses and Europe, and viewed A.J. Wright as a distraction,” Howard Tubin, an RBC Capital Markets analyst in New York, wrote today in a note to clients. He rates TJX as “outperform.”
The shares rose 7 cents to $45.03 at 12:58 p.m. in New York Stock Exchange composite trading. The stock had gained 23 percent this year before today.
Less Affluent Consumers
TJX is shutting A.J. Wright 12 years after starting the chain to attract consumers less affluent than its T.J. Maxx and Marshalls shoppers. The brand generated sales of $779.8 million in the year that ended in January. The company is closing the Wright distribution centers in Indiana and Massachusetts.
The unit that operates T.J. Maxx and Marshalls locations has the potential for 2,300 to 2,400 stores, 300 to 400 more than TJX previously estimated, Meyrowitz said in today’s statement.
The Marmaxx division operated 1,751 stores in the U.S. as of Oct. 30, including 919 T.J. Maxx and 832 Marshalls venues, according to a Nov. 16 statement.