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TJ Maxx is slashing prices even more than usual as stores aggressively try to get rid of goods

TJ Maxx TJ Maxx
TJ Maxx has more discounts than usual.
Business Insider/Mary Hanbury
  • TJ Maxx's parent company, TJX Companies, said in its earnings call on Thursday that it had to discount more than it usually would at this time of year.
  • The additional markdowns helped the retailer to clear out inventory it had not been able to sell while stores have been closed during the coronavirus pandemic.
  • "As a company we're aggressive at clearing goods," President and CEO Ernie Herrman said during the call.
  • Visit Business Insider's homepage for more stories.

Expect to see even more sales than usual as your local TJ Maxx store opens up for business again.

Ernie Herrman, the CEO and president of TJX Companies, the parent company of TJ Maxx, Marshalls, and HomeGoods, said on Thursday that the retailers had to use more discounting than usual to clear inventory that had been sitting in closed stores and distribution centers.

Herrman said the company's first priority was to sell off seasonal items, so it discounted those first.

"We took significantly more markdowns than we normally would at this time of year," Herrman said during the company's first-quarter earnings call.

"However, once we clear through this inventory, we are set up very well to start flowing fresher merchandise through our stores," he added.

TJX closed all its stores, distribution centers, and offices worldwide on March 19. It started reopening stores on May 2. By Thursday, more than 1,600 stores were back open globally, including stores in 25 US states and all locations in Germany, Poland, Austria, the Netherlands, and Australia. It said it was expecting to be fully open by the end of June.

Excess inventory is a problem that many "nonessential" retailers that were forced to temporarily close during the pandemic will be sorting through in the coming weeks. Many are likely to heavily discount their products to entice shoppers to buy them. Others might start sending more items to off-price retailers like TJ Maxx or Marshalls. Still others might explore packing away seasonal items and trying to sell them next year.

Herrman appeared confident that TJX's stores, which stock excess inventory from full-price brands, would thrive in this environment.

"The marketplace is loaded with inventory, and I am convinced that we will have access to plenty of high-quality brands and merchandise to offer to consumers," he said.

"As a company, we're aggressive at clearing goods," he added.

Though TJX reported a net loss of $887.5 million for the quarter that ended on May 2, it said it was encouraged by early signs that shoppers were eager to come back to stores.

"Initial sales overall have been above last year's sales across all states and countries for the over 1,100 stores that have been reopened for at least a week," the company said in its earnings press release. "However, it is still early in the quarter and sales could fluctuate."

SEE ALSO: Every day will be Black Friday with non-stop sales throughout the summer

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