At the Marshalls store in Downtown Crossing, a lone employee sweeps the floor, trying to zig zag between tightly packed racks of discounted Calvin Klein and Michael Kors shirts and pants.
But it was a cluster of irreverent T-shirts, including one with a giant head of rapper Snoop Dogg, that caught the eye of one shopper.
“At work, I’m known for my T-shirts,” she tells her companion as she grabs three of them.
A rack of $7.99 T-shirts sitting along side the biggest fashion brands in the world may seem random, confusing even.
But TJX’s time-tested formula — a blend of discounted national brands and a treasure hunt approach to in-store shopping — has been particularly effective of late. While rivals Target, Macy’s, and Foot Locker are struggling to persuade inflation-wary consumers to spend money, the Framingham-based parent of T.J. Maxx, Marshalls, and HomeGoods is enjoying strong growth across all of its businesses.
The company recently said sales at stores open for at least a year jumped 6 percent in the three months that ended July, and executives say they expect the good times will carry into 2024.
“We are in an outstanding position to continue shipping fresh and compelling merchandise to our stores and online throughout the fall and holiday selling seasons,” CEO Ernie Herrman said in a statement. “We continue to see excellent opportunities to grow sales and customer traffic, capture market share, and drive the profitability of our company.”
The normally tight-lipped company declined to make executives available for interviews. But data from analytics firm Placer.ai suggest the chain is simply drawing more foot traffic these days: The number of people who entered a T.J. Maxx or Marshalls store in June and July was up around 17 percent compared to the same period in 2022.
A shaky economy normally helps TJX because that’s when other retailers tend to accumulate unsold inventory they need to unload. But TJX over the years has proven to be a formidable merchant in its own right, analysts say, because it knows how to project value and surprise to consumers no matter the state of the economy.
“TJX represents the last of the great merchants in retail,” said Carol Spieckerman, founder and president of Spieckerman Retail consulting firm. “TJX has trained shoppers to expect a garage sale, in good times and bad times.”
Only this garage sale resembles a department store stocked with designer brands such as Jones New York, Kenneth Cole, and Marc Jacobs at prices generally 20 to 60 percent lower than their original price. The company employs 1,400 buyers — a robust human supply chain at a time when many big retailers increasingly rely on algorithms — to buy products from some 21,000 vendors across the world. Such dogged efforts keep TJX racks endlessly refreshed and interesting.
“Their merchandising tends to be quite good,” said Pablo Garces, a retail analyst with S&P Global Ratings. “The company’s inventory is quickly paced because its buying environment is so plentiful.”
TJX invests a lot of time and money in training their buyers into becoming “intelligent risk takers,” as former CEO and current board chairwoman Carol Meyrowitz put it in Harvard Business Review.
“Buyers must thoroughly understand consumer and fashion trends and the right value for every product we sell,” she said. “They have to be opportunistic and extremely flexible. Being an outstanding buyer demands curiosity — and a lot of training.”
The strategy has paid off.
Debra Goldman is a die-hard TJX shopper that never leaves a store empty-handed. The workout instructor in Wayland has found everything from pet food and baby supplies to jewelry and high-end clothing. For their 17th wedding anniversary, Goldman’s husband even gave her a gold ring that cost about half of the regular price, she said.
“You don’t know what they are going to have there,” Goldman said. “I always go through the whole store.”
Though TJX caters to a wide range of customers, the company has lately proven to be quite popular with Millennial and Generation Z shoppers — a core demographic for any retailer that wants long-term customers.
“We have been attracting a disproportionate number of new (younger) shoppers, which is what we really look at in terms of future growth because that’s the future higher spend,” CEO Herrman told analysts during a recent conference call.
TJX even recently trended in the TikTok phenomenon known as Bama Rush, in which aspiring sorority girls at the University of Alabama — and many other schools — post pictures of their Rush Week outfits (sometimes procured at T.J. Maxx, of course). Videos under the search term “alabama rush 2023 T.J. Maxx” collectively attracted 347 million views.
Documenting the hunt for stylish clothing and accessories to wear at parties and rush events has become a tradition in itself. In previous years, TikTok videos show students assembling outfits from brands including Steve Madden, Dolce Vita, and Marc Fisher.
TJX’s connection with Gen Z is especially impressive since US apparel retailers have struggled to reach such shoppers, who have been flocking to cheaper “fast fashion” brands like Shein, H&M, and Zara. But TJX offers low prices too, often on unsold higher-quality clothes otherwise destined for a landfill or incinerator.
Another counterintuitive aspect of TJX’s success: physical stores, not the Internet, rule supreme. After all, a treasure hunt just isn’t the same when you’re shopping online.
E-commerce accounted for less than 3 percent for the company’s nearly $50 billion in annual sales the last two years, according to regulatory filings. By contrast, Walmart generated about 13 percent of its $611.3 billion in revenue last year from online sales.
And as TJX searches for new ways to draw customers, the company is expanding its playbook. The retailer is not just buying manufacturers’ leftovers but is increasingly willing to collaborate with brands like Michael Kors on creating off-price versions of their brands just for TJX stores.
“Consumers seem happy to buy something with a prestigious brand at what looks like a discount — even if it’s not the same merchandise that is sold in full price stores,” said Jane Singer, managing director of JDT Research in Hong Kong.
Those discounts are drawing in customers, who are still willing to spend money — if not quite as much — on things that make them feel good, especially during a tough economy. Add in wide-ranging merchandise and the thrill of a treasure hunt and TJX’s formula is working pretty well these days.
“I love absolutely everything about T.J.Maxx,” said Lori Sullivan of Malden. “It is the first place I go to find anything.”
Thomas Lee can be reached at firstname.lastname@example.org.