Shopping Centers and Retailers and Retail and Real Estate & Retail

TJX closing A.J. Wright brand, cutting 4,400 jobs

December 10, 2010

TJX Cos. says it plans to close its A.J. Wright discount stores by mid-February, cutting 4,400 jobs and converting some stores to other brands such as T.J. Maxx.

Ninety-one stores will be converted into T.J. Maxx, Marshalls or HomeGoods stores, and 71 will close entirely, along with two distribution centers. About 3,400 staffers will remain employed at the converted stores.

TJX said the move allows the company, based in Framingham, Mass., to focus on its more profitable businesses. Most positions are part time.

The chain has four stores in Indianapolis – at 53rd Street and Keystone Avenue, on South East Street at Southern Plaza, on Crawfordsville Road in Speedway, and along East 10th Street in the Linwood Square shopping center. The Indianapolis stores are not on a list of stores slated for closures, which means they will likely be converted into other TJX stores.

"All associates will have the opportunity to be compensated through the holiday season, and about half of the positions will be retained through late January," CEO Carol Meyrowitz said.

All 162 A.J. Wright stores will close by mid-February. And 91 will reopen under a different name after eight weeks.

After the cuts TJX will have about 150,000 staffers. As of December, the company operated 924 T.J. Maxx stores, 832 Marshalls and 36 HomeGoods in addition to the 162 A.J. Wright stores.

The company said it will cost $150 million to $170 million to close the stores and $12 million to $15 million for the store conversions.

TJX launched A.J. Wright in 1998 as a discount store brand similar to T.J. Maxx and Marshalls, selling clothing, home decor, shoes and other items, but it never performed quite as well as its sibling stores. T.J. Maxx and Marshalls have benefitted as shoppers hunt for bargains due to high unemployment and the uncertain economy.

But A.J. Wright stores offered even lower-priced products than T.J. Maxx and Marshalls, and that turned out to be not as appealing to shoppers.

During the company's most recent quarter, revenue in stores open at least one year rose 1 percent at T.J. Maxx and Marshalls, rose 3 percent at HomeGoods and fell 2 percent at A.J. Wright stores.

As a result, the company will take a charge of 27 cents to 30 cents per share in the fourth quarter and 14 cents to 17 cents, in total, per share in the first quarter of its next year.

Therefore, the company expects net income of 62 cents to 64 cents per share in the fourth quarter and $3.08 to $3.10 per share for the year including the charge.

Excluding the costs, it expects fourth-quarter net income of 89 cents to 94 cents per share for the fourth quarter and $3.35 to $3.40 for the year.

Analysts expect net income of 93 cents for the quarter and $3.38 per share for the year. Analyst estimates typically exclude onetime items.

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