New store openings fuel TK Maxx sales
TK Maxx, the discount retailer, has reported a 10.6% increase in annual turnover boosted by the opening of 23 new stores across the UK.
The company has emerged as a shining star in the gloomy UK retail market, with turnover increasing by to almost 3 billion in the year ended 3 February 2018. The results are in stark contrast to those of department stores and general retailers, with the challenging market conditions claiming several victims this year.
Despite the economic uncertainty and general gloominess, TK Maxx opened 14 TK Maxx stores and nine Homesense stores during financial year 2017/2018 and closed zero locations. It currently has a total of 390 sites in the UK.
But the store opening programme, coupled with the launch of a new processing centre in Wakefield, meant a £21 million decline in the company’s profit to £74.4 million.
TK Maxx said the new 1.2m square feet logistics centre will significantly expand its processing capacity, and is part of a wider effort which also saw the introduction of click-and-collect in all TK Maxx stores in the UK during the period. Staff recruitment and IT expenses also impacted profits, accounts showed.
Hannah Thomson, Globaldata’s senior retail analyst, told The Telegraph that TK Maxx’s performance was “impressive”.
“While high street powerhouses Marks & Spencer and Arcadia have seen their clothing market shares drop by 1.9 percentage points each over the past five years, TK Maxx has grown its share from 2.6pc to 3.2pc,” she said.
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