TJX Cos. to expand into Mexico through joint venture

The TJX Companies is entering a new region as it partners to expand its footprint south of the border.

The off-price giant has entered into a joint venture with Grupo Axo, S.A.P.I. de C.V., an operator of global brands in Mexico and South America that includes both full- and off-price formats, to expand in Mexico. Under the terms of the agreement, TJX would own 49% and Axo would own 51% of the joint venture. 

The joint venture would comprise what is now Axo’s off-price, physical store business in Mexico, which includes more than 200 stores for its Promoda, Reduced and Urban Store banners. The financial terms of the deal would be announced after it is completed, TJX said. 

The news comes on the heels of TJX’s strong first-quarter performance, which included earnings above expectations and sales gains across all its divisions. 

“As the world’s retail leader in off-price apparel and home fashions, we are excited about the opportunity to expand to Mexico through our partnership with Axo, and grow and enhance that country’s leading off-price retailer,” said Ernie Herrman, CEO and president of TJX Companies. “With TJX’s decades of experience as an international, off-price retailer, and Axo’s established base of over 200 off-price stores and 30 years of operating experience in Mexico, we see excellent potential to grow in another region and deliver our value proposition to a growing population of fashion- and value-conscious consumers in Mexico.”

TJX said it does not anticipate this proposed transaction to have a material impact on its previously communicated sales, profit or earnings per share guidance for its current fiscal year.

The company operates more than 4,900 stores across nine countries, including TJ Maxx, Marshalls, HomeGoods, Homesense, and Sierra in the U.S.; Winners, HomeSense, and Marshalls in Canada; TK Maxx and Homesense in Europe; and TK Maxx in Australia.

Axo is a leading multi-brand and multi-channel retailer of apparel, fashion accessories, footwear, beauty and personal care product categories, with a brand portfolio of recognized brands sold through more than 6,900 points of sale in department stores and more than 970 boutiques in Mexico, Chile, Peru and Uruguay.

BofA Securities is acting as financial advisor and Ropes & Gray LLP is providing legal counsel to the Company in connection with this transaction.