T.J. Maxx and Marshalls parent TJX Cos. (NYSE:TJX) announced plans on Friday to slash more than 4,000 jobs and shut down its A.J. Wright division.
Framingham, Mass.-based TJX said it plans to convert 91 A.J. Wright stores into T.J. Maxx, Marshalls and HomeGoods stores. The remaining 71 A.J. Wright stores will be shuttered.
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The move is aimed at improving overall profitability by focusing on its more successful brands.
As a result of the moves, TJX will eliminate 4,400 positions, most of them part-time jobs. The retailer employed about 154,000 employees as of October.
“While I believe this move makes us a much stronger company and will benefit TJX in both the near-term and long-term, it was not an easy decision as many positions will be eliminated and it will be difficult for our affected associates,” CEO Carol Meyrowitz said in a statement. “However, it will allow us to focus our financial and managerial resources on our highest return businesses, all of which have significant growth opportunities.”
TJX said all impacted associates will have the opportunity to be compensated through the holiday season, and most of the positions will be kept through late January. The company said it is also committed to providing enhanced severance benefits and other assistance.
TJX expects the closures to cost $150 million to $170 million and the 91 conversions to cost about $12 million to $15 million. The company plans to take a charge of 27 cents to 30 cents a share in its fiscal fourth quarter.
Taking into account the new moves, TJX said it sees fiscal fourth-quarter EPS of 62 cents to 64 cents and fiscal 2011 EPS of $3.08 to $3.10. Analysts had been calling for EPS of 93 cents in the fourth quarter and $3.38 in fiscal 2011.
After being halted earlier in the session, TJX’s stock was off 0.5% to $44.75 in the wake of the updated guidance and consolidation announcement.