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Family Clothing Industry Research Report

11 December 2019
Bcom 214 Section 6
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This report will break down each of the companies willing to occupy the newly available space
at the Peoria mall. Using the SBAR method, it is highly recommended that TJX Companies be
chosen as the store to occupy the available space. This document will assist in breaking down
each company and analyze the strengths and weaknesses between the competitors. This report
will consist of the situation, background, analysis, and conclude with the final recommendation.

Situation
Peoria Mall in Peoria Arizona has a newly available space for an apparel store at their mall. The
executive board of the mall has been given offers from Abercrombie and Fitch Co., Ross Stores,
Gap, Inc., and TJX Companies, Inc. to occupy the space. The goal is to determine which one of
these stores would be the best fit for the mall and would attract the most consumers in order
to sustain the productivity of the mall and the area.

Background
Abercrombie and Fitch Co.
The CEO of Abercrombie and Fitch is Fran Horowitz and brings in a salary of one point two
million dollars. The company was incorporated in 1996 and currently employs about 7,000
people as of February of 2019. Abercrombie and Fitch also has operations in North America,
Europe, Asia, and the Middle East and has about 2,900 shareholders as of March 2019.
Currently, the company has a market share of .6%.

Ross Stores
The CEO of Ross Stores is Michael Balmuth and his salary is one point three million dollars. Ross
was incorporated in 1989 and currently employs over 88.000 employees as of February 2019.
Ross Stores provides brand and designer apparel discounts of up to 60% off regular department
prices and targets men and women between the ages of 18 to 54. Ross controls 14.1 percent of
the family clothing market.

Gap Inc.
The current CEO of Gap Inc. is Robert Fisher and has been an executive of Gap since 1999. Gap
was incorporated in 1969 and is currently employing 135,000 people as of February 2019. Gap
has over 6,000 shareholders and have stores in the U.S., Canada, U.K., France, Ireland, Japan,
China, Taiwan, and Mexico. This corporation currently controls 7.3 percent of the family
clothing market.
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TJX Companies
The CEO of TJX is Carol Meyrowitz and gains a salary of 1.04 million dollars. TJX was
incorporated in 1962 and is currently employing 270,000 employees as of February 2019. TJX
companies is an off-price apparel and home fashion retailer. Their segments are comprised of
Marmaxx, and HomeGoods and both have chains in Europe and Australia. The company has just
over 2,000 shareholders and currently controls 15 percent of the family clothing market. That is
more than any other competitor in the industry.

Analysis
To narrow down the options of which company should be occupying the available space in the
mall, the two weakest competitors will be eliminated on the basis of market controlled by all
the parties involved. The following pie chart lays out the amount of market share controlled by
each company:

MARKET SHARE
Gap, 7.30%

TJX, 15%

Ross , 14.10% Abercrombie ,

0.60%

As shown in the chat above, TJX and Ross control much more of the market than anyone else in
the industry. Gap is the third largest company in the industry, but Ross nearly doubles their
market share and TJX doubles them. Abercrombie and Fitch doesn’t come close to any of its
competitors and struggles to compete in the industry.
Furthermore, Gap and Abercrombie and Fitch will be taken out of the running to occupy the
available space in the mall. They simply do not attract as many customers as TJX and Ross and
would not be as good of a fit for the further success for the mall.
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Difference in Total Revenue between Ross Stores and TJX

Now that the two weaker stores have been eliminated, the choice will be between Ross and
TJX. First, the following graph that will be analyzed id the comparison between the total
revenue of both companies. This graph is shown below:

Revenue
40
35
REVENUE IN BILLIONS

38
30
25
20
15
10 14
5
0
Ross TJX
STORE

As seen in the above graph, TJX gets a lot more customers in the door than Ross. TJX has more
than twice the amount of yearly revenue than Ross and helps them gain the edge in the
industry. Since the revenue of TJX is so high, it enables them to hire more employees in order to
meet the demand of their consumers. This also shows that it will help the local in economy in
Peoria if this store is given the available space at the mall.

Difference in Total Net Income between Ross and TJX

TJX has the edge when it comes to revenue, but the net income often says a lot more about the
company than just the revenue. Net income is the amount of money the company makes,
rather than just what goes into the cash register. Below is the graph comparing the net incomes
of the two companies:
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Net Income

0 0.5 1 1.5 2 2.5 3 3.5

Income in Billions

TJX Ross

As the graph shows above, TJX also doubles the net income of Ross, showing that they overall
are a more successful company.

Recommendation
First, Abercrombie and Fitch and Gap were eliminated sine they were the two stores the were
less productive in the family clothing industry. That left us between Ross and TJX, and judging
by the data above, it is highly recommended to TJX occupies the available space on the mall. It
is the obvious choice since they attract more customers than any other store in the industry,
control the market, and lead all other stores in revenue and income. This addition to the mall
will certainly bring in a consistent flow of shoppers for years to come.

Conclusion
This report covered the situation, background, analysis, and a recommendation in order to
determine which company should fill the available space at the Peoria mall. After the analysis, it
is highly recommended that TJX companies occupies the available space due to their great
success in the industry. Be sure to send an email in response to this recommendation by
December 12th in order to get the application sorted out as efficiently as possible. Please direct
all inquiries to Diego Bustamante by email at diegobustamante19@hotmail.com.
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References

Abercrombie and Fitch Co. (2019). Company Details. Retrieved from Mergent Online database.

Abercrombie and Fitch Co. (2019). Competitors. Retrieved from Mergent Onlime database.

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

Ross Stores Inc. (2019). Company Details. Retrieved from Mergent Online database.

The Decline Continues. (2019). Retrieved from

https://seekingalpha.com/article/4309691-abercrombie-fitch-decline-
continues

The Gap Inc. (2019). Company Details. Retrieved from Mergent Online database.

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