Dive Brief:
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TJX, which runs TJ Maxx, HomeGoods, Marshalls and other off-price banners in the U.S. and abroad, is expanding into Mexico, thanks to a joint venture with Grupo Axo, which operates full- and off-price brands in Mexico and South America.
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The partnership entails running and growing Axo’s off-price, physical store business in Mexico, including more than 200 Promoda, Reduced and Urban Store locations. TJX would own 49% and Axo would own 51%.
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The deal remains subject to antitrust clearance in Mexico, plus customary closing conditions, the companies said in a press release. Financial details will be disclosed after closing, expected to be later this year. TJX said the proposed transaction won’t likely impact its guidance for the year.
Dive Insight:
TJX joins Ulta in teaming up with Axo to make inroads into Mexico. The beauty retailer announced its own partnership with the company in March.
Axo’s portfolio includes various brands in apparel, accessories, footwear, beauty and personal care product categories, sold via department stores and more than 970 boutiques in Mexico, Chile, Peru and Uruguay, per the press release.
“With TJX’s decades of experience as an international, off-price retailer, and Axo’s established base of over 200 off-price stores and 30 years of operating experience in Mexico, we see excellent potential to grow in another region and deliver our value proposition to a growing population of fashion- and value-conscious consumers in Mexico,” TJX CEO Ernie Herrman said in a statement.
In addition to inking this deal with Axo, TJX this year plans to add 10 stores in Canada, 15 in Europe and five in Australia, executives told analysts last month. Longer term, the company could add more than 1,300 more stores within its existing banners and countries of operation, they said.
Several analysts see expansion abroad as a growth area for the off-pricer. In Q1, the net sales in Europe and Australia rose 8.8% year over year to $1.5 million, and in Canada rose 7.2% to $1.1 billion. Jefferies analysts led by Corey Tarlowe in a client note last month called out the home category and international operations as “unique growth opportunities for TJX.”
“Economic uncertainty drives consumer migration to off-price both in U.S. and internationally,” they said.
