TJ Maxx Quietly Braving The Online Wilds Again

Most retailers like to make a big deal when they come onto the e-commerce scene, yell and scream and make tempting offers to get their online store off to a flying start. Not TJ Maxx (NYSE:TJX) though. The discount clothing chain didn't even make enough noise to catch the attention of the people whose job it is to follow them.

"I'm not too surprised they didn't make an announcement," Jennifer Davis, a senior retail analyst with Lazard Capital Markets, told the Boston Globe. Despite tracking the company, even she didn't know the site had gone live Tuesday (Sept. 17) afternoon. "They want to make sure they can do it right and profitable. They want to start slow and make sure they can handle it."

That caution is born out of the company's failed attempts at the same thing more than six years ago. TJ Maxx launched its first U.S. website back in 2004 but had to shut it down just a year later due to poor customer feedback.

Much of that failure had to do with the nature of TJ Maxx's business. Selling off-season fashions and excess runs of designer goods means sizes, colors and quantities of various items are inconsistent at best, and translating that chaotic inventory to the online space proved too challenging the first time around.

But the company has been slow to get back in the ring, in large part because, according to analysts like Michael Baker of Deutsche Bank Securities, they haven't really needed an online store.

"Their business has been so strong without it," he said. "There hasn't been a great urgency to launch."

With the acquisition of online clothing retailer Sierra Trading Post this December, though, the company found itself with the expertise it needed to make that leap to the web once more.

"We have a very strong team at TJX that has been working on this," TJX spokeswoman Sherry Lang told the Globe. "Certainly, the experience and expertise that Sierra brought to the company have been helpful."

So what of the new site? It is expected to carry a smaller number of products that are available in larger quantities to avoid the problems it ran into last time around. According to Davis, there are more high-fashion items than she expected, something that will be crucial to the company making back its initial investment.

And when it comes to taking sales from the retail stores, she doesn't expect a major turf war.

"Consumers like to shop all kinds of different ways," Davis said. "There are some people who shop online and because TJ Maxx doesn't have a website, that consumer might not shop at all. It's a way to gain a new customer or an incremental sale from an existing customer."

For more:

- See this Boston Globe story

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