Can an Off-Price Strategy Help Macy’s Inc Steal Shopping Dollars From TJX? | Madison

If imitation is the sincerest form of flattery, then TJX Companies (NYSE: TJX) is probably smiling at the compliment Macy’s (NYSE: M) is paying. The department store chain has already said it views its off-price rival, not Amazon, as its biggest threat. Macy’s now intends on copying what TJX has achieved with T.J. Maxx and Marshall’s by investing in its own off-price Backstage store.

But simply going through the motions won’t guarantee success, as any number of retailers have tried to emulate TJX’s off-price magic. The demise of Filene’s Basement and Loehmann’s, both of which were resurrected as online-only retailers, shows that simply plastering a discount price tag on merchandise isn’t always a winning formula. And Macy’s is taking on its rival in unique ways that will make it even more of a challenge.

A special kind of company
Few companies of any kind, let alone many retailers, have enjoyed the strategic and financial brilliance exhibited by TJX, a combination that over the past 25 years has allowed its stock to soar by more than 7,300%. Through good and bad times — and it’s had one or two of the latter itself — the off-price retail leader has outlived and survived changing fashion and consumer tastes as well as emerging trends that run pretty similar to its own model.

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