TK Maxx bucks tough UK trend with rising sales and profits
Discount retailer TK Maxx has seen sales and gross profit rising in the latest year as its UK expansion continued and it bucked the downward trend of the retail sector.
In the 52 weeks to February 2, sales at its parent firm TJX UK rose 6.4% to £3.1 billion and like-for-like sales in-store rose 4%. Gross profit rose to £464 million from £422.5 million and pre-tax profit was up to £120.5 million from £87.1 million. Net profit increased to £103.4 million from £74.7 million.
The company’s growth was helped by the opening of 21 stores, eight under the TK Maxx banner and 13 under the Homesense name. It now has 345 of the former and 66 of the latter. Since the period these results cover ended, the firm has also opened its biggest UK fashion-focused store on Oxford Street in London.
Chloe Collins, Senior Retail Analyst at GlobalData, said of all this: ’‘TK Maxx’s multi-branded value for money proposition continues to win over UK shoppers. Despite the current challenges facing physical retail, the TK Maxx bargain-hunting experience encourages repeat visits, with Homesense stores particularly engaging owing to strong visual displays showcasing its trend authority and helping to entice spending, with sales at the fascia up 17.2% as it continues to expand.”
She also said the new Oxford Street store “with a wider range of Gold Label designer items, “will attract the capital’s fashionistas and tourists, and emphasise the retailer’s style credentials.”
But she added that while TK Maxx’s stores continue to drive sales, “significant improvements are needed across its digital platforms. Model images showcasing full outfits should be added to provide inspiration and better advise on garment fit, while enhanced fulfilment options, such as third-party pickup and next day click & collect, as well as free online postal returns, are necessary to increase convenience for shoppers."
And she thinks "it must also post more regularly on social media, and create more engaging content, like its partnership with four style influencers, including Sophie Milner and Gabrielle Bassett, for the Oxford Street store launch, as similar collaborations will drive desirability among a younger audience. Homesense should also consider making its website transactional to widen its reach.”
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