(Filed Under Financial and General Interest News). The TJX Companies Inc. is shelving its A.J. Wright concept, which has lagged behind as the company’s T.J. Maxx, Marshalls and HomeGoods divisions have grown increasingly profitable.
The company announced Friday that it is converting 91 A.J. Wright stores into T.J. Maxx, Marshalls and HomeGoods stores. It plans to close the remaining 71 A.J. Wright stores, as well as the division’s two distribution centers in Fall River, Mass. and South Bend, Ind., and its headquarters in Framingham, Mass.
TJX expects to close all 162 A.J. Wright stores between late January and mid-February 2011. It estimates that the 91 stores being converted will reopen in approximately two months.
TJX will eliminate approximately 4,400 full and part-time positions as a result of the closure. The company said that it will keep most of these employees on staff until late January, adding that it will attempt to place individuals at the stores that are closing at nearby T.J Maxx, Marshalls and HomeGoods locations.
The approximately 3,400 associated at the 91 A.J. Wright stores that are converting will remain on staff, the company said.
Carol Meyrowitz, president and C.E.O of TJX, expects the off-price retail company to improve its financial position with the closure. “While I believe this move makes a much stronger company and will benefit TJX in both the near-term and long-term, it was not an easy decision as many positions will be eliminated and it will be difficult for our affected associated,” she said. “As a company, however, it will allow us to focus our financial and managerial resources on our highest return businesses, all of which have significant growth opportunities, as well as significantly improve the economic prospects of our business.
“A critical factor in this decision is that, over the past two years, we have learned how to serve the A.J. Wright customer with our T.J. Maxx and Marshalls banners and have very strong performance in these stores in demographic markets similar to those in which we have A.J. Wright stores.”
TJX expects to incur estimated pre-tax costs related to the closing of between $250 and $280 million, which would reduce net income by $150 to $170 million, or 38 to 43 cents per share.
As of early December, TJX operated 924 T.J. Maxx stores, 832 Marshalls, 336 HomeGoods and 162 A.J. Wright stores in the United States, as well as stores in Canada and Europe.
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