TK Maxx‘s UK arm has recorded a fall in profits and a dramatic slowdown in comparable sales due to rising wages and costs arising from expanding the business.
According to accounts filed at Companies House, TJX UK — which consists of TK Maxx, HomeSense and tkmaxx.com — profit for the financial period in the year to January 28 stood at £95.8 million, 19.6 per cent down from the £119.2 million recorded the previous year.
The retailer also endured a 21.7 per cent decline in profit on ordinary activities before tax, from £142.3 million to £111.4 million, during the year to January 28.
Meanwhile, operating profit nosedived 34.5 per cent to £90.3 million in that same period, down from £138 million.
One the other hand, gross profit grew from £313.9 million to £414.8 million year-on-year.
Additionally, TJX UK’s sales grew 10.3 per cent from £2.43 billion to £2.68 billion during the year, but UK store like-for-likes grew at a slower rate of 0.6 per cent compared to the 4.6 per cent recorded the previous year.
TJX UK’s financial results were impacted by a 15.8 per cent rise in salaries and wages, as well as the opening of 19 new TK Maxx stores, five HomeSense shops and a new processing centre in Wakefield, West Yorkshire, last year.
The retailer — which is owned by TJX Europe, which in turn is owned by US-based TJX Companies — now has 367 stores across the UK, 323 of which are TK Maxx.
The company is also planning to open its new European headquarters in Watford.
“In a challenging retail environment in the UK we were pleased with our results which we believe speak to our resilience and ability to drive sales,” TJX Europe said in a statement.