Peoria, Arizona Mall Space

Hailey Mopas
December 9, 2019
As requested, this report is an analyzation of the four competing companies for space at the
Peoria, Arizona Mall. It has been created to assist in providing the mall with a recommendation
about the available retail space and will provide context on background information, the financial
performance, and brief explanations of each company.

Situation
Peoria, Arizona mall has a new space available that is only designated for apparel stores. The
four companies of TJX Companies Inc., Ross Stores Inc., Abercrombie & Fitch Co., and Gap
Inc. have inquired about occupying the space. Each company was required to submit data on
current space size, weekly sales and other factors related to the store’s location.

Background
Family clothing retailers provide clothing for men, women, and children with no specific focus
on gender or age. The major products and services for this industry are men’s and women’s
formal/casual wear. The revenue is expected to continue to grow, regardless of other competing
industries.

Industry Outlook
In the next few years, the family clothing industry will continue to perform strongly. The
demand for clothing is dependent on household disposable income. When disposable income
increases, consumers are more likely to use their money on discretionary spending (Claire,
2019). However, disposable income is expected to grow steadily which will increase demand.
The revenue will grow at an annualized rate of 0.6% to 115.9 billion over the next five years in
this industry. (Claire, 2018).

Products and Markets

Women’s apparel accounts for 55.9% of the clothing industry revenue and 38.9% of the
consumers are aged 45 to 64 (Claire, 2018). The demand for the younger age group is expected
to grow which will create a new market in the clothing industry. Consumers like to purchase
recognizable brand names and having branded clothing creates an advantage that assists retailers
in generating more revenue.
 Figure 1- Market for Family Clothing Stores in the US

Source: Claire, 2018

Competitive Landscape
In 2019, the top four competing companies TJX Companies Inc., The Gap Inc, Ross Stores Inc.,
and Abercrombie & Fitch Co. account for 37.1% of the industry’s revenue (Claire, 2018).TJX
Companies and Ross stores are expected to grow strongly because of their discounted prices to
consumers. The popularity of bargain hunting has boosted financial performance for discounted
stores.

The Gap Inc.

Gap Inc. was established in San Francisco in 1969 and is one of the most famous apparel brands
in the United States. It is known for selling casual clothes such as jeans, t-shirts, shorts, etc (The
Gap Inc, 2019). As of 2019, the company brings in weekly sales of $1,551,978 and revenue of
$16,322,000 (The Gap Inc, 2019 ). Since 2018, revenue increased by 4.57% and will continue to
grow at a steady rate (The Gap Inc, 2019).

Ross Stores Inc.

In Ross’ business summary, it states “Ross provides name brand and designer apparel,
accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off
department and specialty store regular prices every day” which explains their famous discounted
strategy (Ross Stores Inc, Company Details, 2019). As of 2019, the company brings in weekly
sales of $965,597 and revenue of $15,434,000. Since 2018, revenue increased by 6.01% and will
continue to increase (Ross Stores Inc, 2019).

Abercrombie & Fitch Co.

Abercrombie & Fitch is an apparel company that sells casual clothes, personal care products, and
accessories for women, men and children. As of 2019, the company brings in weekly sales of
$907,784 and revenue of $3,592,000 (Abercrombie & Fitch, 2019). Since 2018, revenue
increased by 2.79% but has experienced low demand for their items (A&F, 2019).

TJX Companies
TJX Companies is an off-price apparel and home fashion retailer sells various products in over
4,300 stores such as T.J. Maxx, Marshalls, Homegoods, Homesense and Sierra Nevada stores
(Claire, 2018). As of 2019, the company brings in weekly sales of $1,923,670 and revenue of
$40,012,000 (TJX Companies Inc, 2019). According to a recent news article by Michael Foster,
the company’s profit margin has increased 41% over the last decade.

Analysis
Consumers tend to move towards specific retail platforms because of the convenience and price
savings of brand names. Because of this, TJX Companies Inc. and Ross Stores Inc., do extremely
well during economic downturns compared to stores such as Abercrombie & Fitch Co., and The
Gap Inc. (O’Conner, 2018). This results in discounted stores to continue to grow in the next few
years. However, TJX Companies Inc. generates the highest weekly sales and revenue compared
to the others because it is the largest discount retailer in the United States.

Figure 2-Weekly Sales

Source: Hunter & McClintock, 2019

Recommendation
TJX Companies Inc. would be the best fit for the available space in Peoria, Arizona mall because
it generates more revenue and weekly sales compared to its competitors. Being one of the biggest
discount retailers in the country, it’s financial performance is expected to improve because of the
increased popularity of bargain hunting. According to Foster (2019), TJX Companies Inc, owns
4,412 stores worldwide today including TJX and Marshalls resulting in management to add 40%
more stores.

Conclusion
Providing the available space for TJX Companies would increase the number of customers at the
Peoria, Arizona mall. It is one of the biggest discount retailers and provides products/services
ranging from family apparel, household products, accessories, toys, etc. The company is
expected to grow in the next few years. Please feel free to contact Marta at
MartaInez@PriceRight.com in the next upcoming weeks to discuss the next steps.

References
Abercrombie & Fitch Co. (2019). Company Details, Industry Outlook, Competitive Landscape.
Retrieved from Mergent Online Database.

Foster, Michael. (December 5, 2019). Shop at TJX for “Hidden Yields.” Money Show.
Retrieved from Mergent Online Database.

O’Connor, Claire. (2018 November). IBISWorld Industry Report OD4235. Discount

Department Stores in the US. Retrieved from IBISWorld Database.

O’Connor, Claire. (2019 August). IBISWorld Industry Report 44814. Family Clothing
Stores in the US. Retrieved from IBISWorld Database.

Ross Store. (2019). Company Details, Industry Outlook, Competitive Landscape. Retrieved from
Mergent Online Database.

The Gap, Inc. (2019). Company Details, Industry Outlook, Competitive Landscape. Retrieved
from Mergent Online Database.

TJX Companies Inc. (2019). Company Details. Retrieved from Mergent Online Database.