Meet TK Maxx, the global retailer arriving to put another “nail in the coffin” of Myer and David Jones
Wednesday, March 1, 2017/
Yet another global brand believes it can carve out a niche in Australia’s increasingly crowded retail market, with reports that US retail giant TJK intends to convert 35 Trade Secret stores into TK Maxx shop fronts in 2017.
The TK Maxx discount department store brand is one of a number of retail businesses owned by US-based TJX International, which purchased Australia’s Trade Secret stores from ASX-listed Gazal Corporation in July 2015 for $80 million.
Speaking to Inside Retail, TJX Australia spokesperson Tessa Buenen said the company believes there’s ample space in the market for a retailer like TK Maxx, which is known for motivating value-hungry customers to hunt through the chain’s fast-changing inventory of designer brands for bargains.
TJX plans to begin converting the Trade Secret stores from April, with a “handful” of additional stores to also be opened throughout the year, according to the report.
“Australian shoppers are extremely savvy and value orientated, so we think our offer is going to be a winning formula here and we’re very excited about our growth opportunities for this market,” Buenen told Inside Retail.
Last week Fairfax reported that TJ Maxx, the sibling brand imprint of TK Maxx, would soon arrive in Australia, with TJX reportedly scouting new locations for the business.
TJX brands include TK Maxx, TJ Maxx, Marshalls and HomeGoods. The company generated $US33.2 billion ($43.3 billion) in sales over the past year, with $4.3 billion of that coming from its European and Australian operations. Sales in the region were up 2% over the past year.
When TJX acquired Trade Secret in 2015, TJX chairperson and chief executive officer Carol Meyrowitz said there were synergies between the two businesses.
“We believe TJX can further develop Trade Secret by leveraging our international leadership experience, buying scale, vendor universe, marketing and other capabilities,” she said.
TK Maxx boasts that it receives thousands of new deliveries into its store daily, and acts as a clearing house for a number of clothing, homewares and gift brands.
The brand runs flash sales of designer goods and its UK operations have had the likes of actress Joanna Lumley spruiking its wares. The chain reportedly operates more than 500 stores in the UK, Ireland, Germany, Poland, Austria and the Netherlands.
Dr Gary Mortimer, associate professor at the Queensland University of Technology Business School, says that despite the influx of global retailers to our shores, the TK Maxx retail format is different enough from the other offerings out there.
“I think Australia still represents a really strong market for global players,” Mortimer tells SmartCompany.
“This is very much about value — it really offers a different type of retailing, a different shopping experience. They take oversupplies, unsold products out of stores and out of suppliers, so don’t expect a full range of sizes.”
There are still lots of shoppers on the lookout to get more value, rather than spend less, says Mortimer, and while there’s still room for new entrants in the market, each one is bad news for Australia’s existing discount retailers, Mortimer says.
With TK Maxx, Mortimer believes it will be the large department stores that could see their market share squeezed.
“You’ve got to think about the direct competitors — and it really does represent another nail in the coffin for David Jones and Myer, and to some extent those middle fashion [retailers].”
SmartCompany contacted TJX Australia for comment on the store rollout but did not receive a response prior to publication.