Summary
The TJX Companies, Inc. (TJX) announced a significant strategic decision to consolidate its A.J. Wright division. This involves converting 91 A.J. Wright stores into other TJX banners like T.J. Maxx, Marshalls, or HomeGoods, while closing the remaining 71 stores. This consolidation also includes the closure of A.J. Wright's two distribution centers and its home office, with the entire process expected to be completed by mid-February 2011. This strategic move is anticipated to result in substantial pre-tax charges for TJX, estimated between $200 million and $220 million, with an additional $50 million to $60 million in operating losses during the closing period. The total estimated pre-tax cost for exiting the A.J. Wright business ranges from $250 million to $280 million. The company expects these charges and losses to be recorded within the A.J. Wright segment, rather than qualifying for discontinued operations treatment.
Key Highlights
- 1TJX is consolidating its A.J. Wright division, converting 91 stores to T.J. Maxx, Marshalls, or HomeGoods and closing the remaining 71 stores.
- 2The consolidation includes closing two A.J. Wright distribution centers and its home office.
- 3The company expects to incur estimated pre-tax charges of $200-$220 million for the closure.
- 4Additional operating losses of $50-$60 million are anticipated during the closing process.
- 5The total estimated pre-tax cost for exiting the A.J. Wright business is between $250 million and $280 million.
- 6The charges and losses are expected to be recorded within the A.J. Wright segment.
- 7The entire closure and conversion process is projected to be completed by mid-February 2011.