Sierra Buy to Boost TJX's E-Business - Analyst Blog
2012年12月24日 - 5:50PM
Zacks
The leading off-price retailer TJX Companies
Inc. (TJX) announced the purchase of Cheyenne,
Wyoming-based off-price Internet retailer Sierra Trading Post. TJX
expects the acquisition to be slightly accretive to its earnings
starting fiscal 2014. It is a strategic acquisition by TJX to boost
its online sales.
TJX bought Sierra Trading Post for $200.0 million in cash,
subject to post-closing adjustments. TJX also acquired Sierra's
office, warehouse and photography studios in Cheyenne, as well as
its customer call centers and four outlet stores in Idaho, Nevada
and Wyoming, as a part of the takeover.
Reportedly, Peter J. Solomon Company LLC and BofA Merrill Lynch
were the financial advisors. Ropes & Gray LLP acted as the
legal counselor.
Sierra Trading Post is a discount Internet retailer offering
outdoor recreation, adventure gear, as well as footwear, clothing
and home decor at 35% to 70% lower prices than those offered by
other retailers. The company sells seconds, overstocks and
closeouts.
Sierra Trading Post, which started its business with an office
space of 500 square feet in 1986, has grown to over 500,000 square
feet today. The company sells almost 1,000 branded products.
The acquisition is beneficial to TJX, which is already geared up
to launch online brands for its HomeGoods and Marmaxx divisions.
More and more retailers are focusing on online business, which
expands their reach to a greater number of customers at a time.
TJX, which competes against
Kohl’sCorporation (KSS), has been
reporting an increase in comparable store sales for the past
several quarters, driven by higher demand and increased consumer
traffic.
We are encouraged by the company’s flexible off-price business
model that allows it to act according to market trends. TJX has a
low-cost structure compared to many other traditional retailers. It
focuses aggressively on reducing expenses across its segments.
Currently, we have a Neutral recommendation on the stock. TJX holds
a Zacks #2 Rank (short term Buy rating).
KOHLS CORP (KSS): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
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