Delivering value in the form of quality, fashion and price is the basic tenet of the off-price concept. At TJX, we accomplish this by buying opportunistically and offering customers an ever-changing merchandise assortment, as well as a convenient shopping experience. Additionally, operating with a highly efficient distribution network and low cost structure is key to our ability to deliver excellent values. Because of the unique aspects of the off-price concept, sophisticated technological systems are developed internally.

At the core of our Company are T.J. Maxx and Marshalls, the two largest and most successful off-price apparel retailers in the world. With the acquisition of Marshalls in 1995, we doubled our size and since then, we have increased profits significantly. The chief factor behind our success continues to be the synergies that exist between these businesses. For example, with one buying organization for both divisions, the Company continues to benefit from increased buying power. Also, in 1998, we saw additional expense savings, primarily in systems and advertising.

For our customers, we have intentionally maintained separate identities for T.J. Maxx and Marshalls. We have accomplished this through merchandising, marketing and the look and layout of our stores. In this way, we have continued to offer our customers different and exciting shopping experiences and thus, reasons to shop at both chains. In 1998, we netted 24 additional T.J. Maxx stores to end the year with 604 and 14 new Marshalls stores, which numbered 475 at year-end. With the continued success of T.J. Maxx and Marshalls, we have determined that the United States can support more stores under both banners than we had originally believed. Therefore, we have increased our planned new store openings considerably and expect to net 53 additional stores between T.J. Maxx and Marshalls in 1999. Over the next three years, our plans call for over 150 new stores between the two chains.

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