With Winners Apparel Ltd. in Canada, and T.K. Maxx in the United Kingdom and Ireland, we have successfully expanded the off-price concept to new geographic markets. Having acquired Winners in 1990 as a five-store chain, today, Winners is the only significant off-price retailer in Canada. We added 11 new stores to the Winners chain in 1998 and ended the year with 87 stores. In 1999, we expect to open 12 stores. We believe that, long term, Canada can support at least 140 Winners stores.

T.K. Maxx opened its first stores in 1994 and introduced the off-price concept to the United Kingdom. As we do typically with new businesses, we build an infrastructure of management and systems before expanding our store base. We are gratified that, in 1998, T.K. Maxx achieved profitability in the United Kingdom and Ireland. Also, in 1998, we opened two stores in the Netherlands which got off to a slower start than we had anticipated. Despite this minor disappointment, we are nonetheless enthusiastic about the prospects of T.K. Maxx on the European continent. In 1998, we added eight T.K. Maxx stores, ending the year with 39. In 1999, we expect to open 15 T.K. Maxx stores. In the long term, we believe the U.K. and Ireland are capable of supporting about 170 T.K. Maxx stores and, if successful on the continent, we believe T.K. Maxx could open an additional 350 stores. Thus, T.K. Maxx continues to offer TJX an important growth vehicle.

At HomeGoods, we have expanded the off-price concept through home fashions product lines. Over the years, HomeGoods has made substantial progress in merchandising and inventory management. Today, HomeGoods offers an exciting array of home product that highlights seasonal merchandise, accent furniture, giftware, lamps, framed artwork and stationery, as well as table top, and bed and bath assortments. Several years ago, we began experimenting with the concept of combining HomeGoods with T.J. Maxx or Marshalls under one roof, creating larger, 50,000 square-foot stores. We call these highly-productive superstores T.J. Maxx ‘N More and Marshalls Mega-Stores, respectively. With the improvements we have achieved at HomeGoods, we are more excited than ever before with the prospects for stand-alone HomeGoods stores, as well as our superstores. We ended 1998 with 21 stand-alone HomeGoods and 14 superstores. By the end of 1999, we expect to have 24 stand-alone HomeGoods and 30 superstores.

A.J. Wright expands upon the off-price concept by bringing it to a large, virtually untapped demographic market for TJX — the moderate income customer. We launched this business in 1998 and ended the year with six stores in the New England region. Just as our other formats have offered prices that are 20-60% below department store regular prices, A.J. Wright offers similar values in comparison to the mass merchandise and budget department store chains. To serve this customer, in addition to fashion apparel for men and women, A.J. Wright features a large children’s department, family shoe department and a “special buys” area. In 1999, we expect to open about 10 A.J. Wright stores, with some outside of New England. While we are still learning about this business, we believe it offers significant growth opportunities for TJX’s future.

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