TJX Europe, the parent company of off-price fashion chain TK Maxx, is slowing its store expansion strategy as its like-for-like sales fell 5% in the first quarter of 2011.
Excluding fluctuations in currency, TJX Europe, which is part of US group TJX Companies, saw overall sales rise by 9% to $560m (£345.8m). However it slipped into the red, posting a loss of $27m (£16.6m) versus a profit of $7m (£4.3m) in the same quarter last year.
TJX Europe also operates the homewares chain Homesense.
TJX Companies said in a statement that it had implemented aggressive markdowns to help clear stock through the first quarter so it could start the new season with a fresh product assortment.
A spokeswoman for the company said: “While TJX Europe’s first quarter results were below last year, we remain confident that this business will get back on track this year.
“We strongly believe that we have identified the issues that need to be remedied and have slowed the pace of store growth in Europe slightly in 2011 to give this business time to regain its very solid traction.
“TK Maxx is fundamentally a strong business that enjoyed a long and successful trajectory for 15 years through the first quarter of last year.
“In the short term, we believe that we are making some progress and both our brands and our values are getting stronger. In the long term, we remain very confident in TJX Europe and the significant growth opportunity it represents for our company.
“We see TJX Europe as ultimately having the potential to grow to 750-875 stores in our current European markets alone.”
TJX Europe ended the quarter with 255 stores in the UK and Republic of Ireland. TJX Europe has 340 stores overall including shops in Germany and Poland.