Exhibit 99.2
CAUTIONARY FACTORS RELEVANT TO FORWARD-LOOKING INFORMATION
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISION
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
TJX desires to take advantage of the new "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 and is filing this Form 8-K
in order to do so. Forward-looking statements necessarily involve assumptions,
risks and uncertainties and require management of the Company to make
assumptions, estimates, forecasts and projections regarding the Company's future
results as well as the future effectiveness of the Company's strategic plans and
future operational decisions. Accordingly, actual results and the Company's
implementation of its plans and operations may differ materially from
forward-looking statements made by or on behalf of the Company, including
certain public documents and oral statements made by authorized officers,
employees and representatives on behalf of the Company. The following discussion
identifies certain important factors that could affect the Company's actual
results and actions and could cause such results and actions to differ
materially from any forward-looking statements related to such results and
actions. Other factors not identified herein could also have such effects.
GENERAL ECONOMIC RISK FACTORS
Forward-looking statements of the Company are subject to the risk that
assumptions made by management of the Company concerning future general economic
conditions such as recession, inflation, deflation, interest rates, tax rates,
unemployment levels, consumer spending and credit and other future conditions
having an impact on retail markets and the Company's business in the U.S. and
foreign markets where the Company operates may prove to be incorrect.
EFFECT OF CONSUMER PREFERENCES AND SPENDING PATTERNS AND SEASONALITY ON SALES;
INVENTORY RISKS
Apparel sales have historically been dependent, in part, upon
discretionary consumer spending, which is affected by general economic
conditions, consumer confidence, availability of consumer credit, weather and
other factors beyond the control of the Company. In addition, the Company's
performance is subject to risks associated with changing fashion, consumer
spending patterns and consumer preferences, including consumer responses to
current fashions and trends toward casual dress. Consumer preferences for family
apparel, accessories, shoes, domestics, giftware and jewelry are difficult to
predict. The Company's business is subject to seasonal influences, with higher
levels of sales and income generally realized in the second half of the year.
-1-
The Company often purchases merchandise off season or otherwise several
months before such merchandise is offered for retail sale. To the extent sales
forecasts are not achieved or consumer demand for the Company's merchandise is
otherwise less than anticipated, the Company would experience decreased
revenues, higher inventory levels and associated carrying costs and potentially
higher markdowns to clear such higher inventory levels.
INTEGRATION OF MARSHALLS
In November 1995, the Company acquired the Marshalls chain of stores.
This acquisition entailed significant additional investment and borrowing by the
Company. The Company believes that there are a number of synergies associated
with the ownership of both T.J. Maxx and Marshalls that have enabled and will
enable it to realize improved operating efficiencies, as well as increased
purchasing leverage, among other advantages. However, although many integration
activities have been completed successfully, there can be no assurance that the
Company's future efforts to integrate Marshalls' administrative and operational
functions into the Company and to achieve such synergies and develop the
Marshalls business will continue to be successful. The Company must also
successfully close a number of T.J. Maxx and Marshalls stores scheduled for
closing prior to the end of fiscal 1998.
MARKET PENETRATION
The Company's ability to achieve desired revenue and profit growth
rates will be dependent on its ability to increase sales at existing store
locations and to open new stores in an overstored retail climate, expand
geographically into other countries or achieve growth through new merchandising
formats or lines of business. There can be no assurance that the Company will be
successful in continuing to identify new store locations that can generate
acceptable sales levels without adversely impacting existing stores, or in
identifying or implementing new merchandising formats or lines of business.
DEPENDENCE ON SUPPLIERS; FOREIGN SOURCING
The Company uses opportunistic buying strategies to purchase large
quantities of merchandise in special situations, closeouts of current fashions
and out-of-season at significant discounts from initial wholesale prices. The
ability of the Company to purchase merchandise at favorable prices is essential
to its business strategy. There can be no assurance that the Company will
continue to be successful in obtaining such merchandise at favorable prices in
the future.
The Company imports a portion of its merchandise directly from foreign
suppliers. In addition, many of the Company's domestic suppliers import a
significant amount of their merchandise from abroad. Many of the Company's
imports are subject to existing or potential duties, tariffs or quotas or trade
sanctions that may limit the quantity of certain types of goods that may be
imported into the United States. Imports and the Company's Canadian and U.K.
operations are also subject to political, currency and exchange rate factors.
-2-
COMPETITION
All aspects of the retail family apparel, accessories, shoes,
domestics, giftware and jewelry business are highly competitive. The Company
generally competes for customers with a variety of conventional and discount
retail stores, including national, regional and local department and specialty
stores, as well as with catalog operations, factory outlet stores, other
off-price stores and other forms of retailing; the Company is subject to the
impact of competition and pricing, including every day pricing and promotional
pricing practices, of these various competitors. In recent years, the Company
has encountered increased competition from department stores, which have become
more focused on promotions to increase sales. Also, certain of the Company's
competitors handle identical or similar lines of merchandise and have comparable
locations, and some have greater financial resources than the Company. The
existence and growth of excess retail space in some areas of the United States
may enable competitors to obtain store locations on terms more advantageous than
those to which the Company is subject under its existing store leases. In
addition, because the Company purchases much of its inventory opportunistically,
the Company competes for merchandise with other national and regional off-price
apparel and other discount outlets.
ACQUISITIONS AND DISPOSITIONS
The current retail environment is extremely competitive, which is
causing consolidation through acquisitions and divestments. As a major retailer,
the Company regularly reviews opportunities in these areas. The Company's
projections and results of operation could be materially impacted by any future
acquisition or divestment activities of the Company.
FOREIGN OPERATIONS
During fiscal 1991, the Company acquired Winners Apparel Ltd., an
off-price family apparel chain in Canada. During fiscal 1995, the Company opened
its first T.K. Maxx stores, an off-price family apparel chain in the United
Kingdom. The success of the Company's foreign operations depends, among other
things, on the ability of the Company to apply its off-price strategies outside
the United States, the demand for the products offered, general foreign economic
and business conditions affecting consumer confidence and spending and the
ability of the Company to expand the number of stores in foreign markets.
RISKS RELATED TO UNIONIZED EMPLOYEES
Many of the employees at the Company's distribution facilities are
covered by collective bargaining agreements with the Union of Needletrades,
Industrial and Textile Employees. If unionized associates were to engage in a
strike or other work stoppage, the Company could experience a significant
disruption of operations and higher labor costs.
-3-
FINANCIAL POSITION; EFFECT ON SUPPLIERS
The Company's suppliers often sell merchandise to the Company on terms
that are based, in part, upon the creditworthiness of the Company. If the
Company's financial position or credit ratings were to decline to unacceptable
levels for any reason, the Company might not be able to borrow generally or
satisfy the covenants in its debt instruments or obtain merchandise from its
suppliers on terms that are as advantageous as those currently offered to the
Company.
FORCE MAJEURE/ACTS OF GOD
The Company's projections and results of operations could be affected
by acts of God such as fires, earthquakes, floods, other natural disasters and
other occurrences that, if they were to affect a material portion of the
Company's retail stores or support facilities, could adversely affect the
Company's projections and results of operations.
OTHER FACTORS
The Company's projections and results of operations could also be
affected by other factors, including contingent liabilities associated with
former divisions, that may be described in the Company's filings with the
Securities and Exchange Commission.
The Company does not undertake to publicly update or revise its forward
looking statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized.
-4-