The Marshall

58 billion, representing nearly a 50 percent increase from 1997. Listed "income from continuing operations before extraordinary item and cumulative effect of accounting change" was $528 million, more than double the 1997 performance (TJX Companies, 2002, p. 17). The Marmaxx operating unit, comprising Marshall's and TJ Maxx, accounted for $8.3 billion in net sales for 2001, or about 87 percent of total volume for all TJX groups (TJX Companies, 2002, p. 35).

TJX as a whole showed a sales increase of 11.8 percent between 2000 and 2001, as compared to 10.2 percent for Ross Dress for Less and 1.3 percent for The Gap (National Retail Federation, 2002). As by far the largest component of TJX, the Marmaxx unit must have had comparable performance.

In the fall of 2002, however, Marmaxx same store sales were showing annual growth of only 1 percent, as compared to 4 percent the previous year (Wedbush Morgan, 2002). This may be attributed to the sluggish economy. As a demonstration of how extraneous factors can affect retail performance, however, sales of fall clothing were depressed by unusually warm late summer and early fall weather (Wedbush Morgan, 2002).

Large volume per store, inexpensive locations, and reduced sales staff in proportion to merchandise flow are among the tactical elements that allow Marshall's to support such reduced prices. As noted above, in addition to apparel and accessories it carries items such as bedding and household clocks. These are viewed by consumers within the broad fashion aura, and thus support rather than distracting from a primary focus on apparel.

Nevertheless, Marshall's positioning in the market should allow it to weather a slowdown relatively well. Its emphasis on off-pricing may even render its fashion offerings an "affordable luxury" for consumers compelled by tight economic circumstances to forgo big-ticket purchases. Moreover, Marshall's is likewise well positioned with respect to the longer-term trend favoring off-pricing and a personal rather than branded sense of style. So long as these structural trends persist, Marshall's is in a position not only to weather an economic storm but to capitalize on a resumption of consumer confidence and spending growth.

Ross Dress for Less tends to skew young, both in the styles and sizes of apparel offered, and in its tight focus on apparel and accessories. The model Ross customer is the young woman or girl looking for attractive outfits at a low price, and less likely to add a set of bath towels to her intended purchases. With its West Coast sensibility and tight focus, Ross Dress for Less has effectively positioned itself as the "entry level" for the fashion consumer.

The opportunities available to Marshall's are the converse of the potential threats facing it. It is about as well-positioned as any fashion retailer to successfully weather the current economic slowdown, retaining its short-term financial strength and strong consumer image.

 

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