It has quietly outgrown Topshop to become the UK’s sixth-largest fashion group. Now TK Maxx is hoping a glut of unsold clothing from rivals will further boost its fortunes. The cut-price US-owned retail group sells an eclectic mix from a Moschino-collared jacket at £99.99, to a Gucci handbag at nearly £1,000 and Sloggi knickers at £2.99. It may only stock one or two pieces of each style or a few items of big-name beauty or homewares brands, but the low prices attached – the Gucci bag is £450 cheaper than its recommended retail price – are key to its appeal. Beloved by bargain hunters, TK Maxx snaps up mostly in-season fashions which department stores, brands and high-street chains have been unable to sell. That stock comes from 21,000 different sources around the world and is mainly excess production, cancelled orders or overstocks. A small amount is made especially for the chain by brands or for its own labels, which include Arabella, Addison and Amaryllis. “We are confident the mix in the second half is going to be very exciting,” says Deborah Dolce, director of the owner, TJX’s, European division, as she eyes the rails in the group’s new store in Uxbridge, west London. “Because we buy in an agile way, we can respond to the stock in the market.” She says the group is not only able to snap up fashion stocks but to rapidly shift into the hot categories – currently beauty, homewares and children’s clothing – to meet demand. Shop managers alter the layout of their store to suit the changing stock, with all shelving on wheels so departments can be enlarged or shrunk to suit what has arrived in the latest shipment. There are no stockrooms – everything goes straight out on to the shop floor. TK Maxx’s tactic of buying product little and often has also enabled it to keep tight control of its stock while shopper numbers were low and increase supply as shoppers became more confident. In the month between stores reopening in July – when most high street lockdowns ended – and 1 August, sales in the group’s international arm, largely made up of its UK business, but also including stores in Germany, Ireland, Poland, the Netherlands and Australia, declined by 1% year-on-year. The UK business, the only one in Europe to have an online store, performed better, Dolce says, although she did not give exact figures. Overall, sales for the international division fell 31% to $880m (£690m) in the three months to 1 August and slumped to a $131m loss from a $50.4m profit in the same period a year before, as the chain’s high-street stores were forced to shut during the pandemic. However, the UK division has proved more resilient than many rivals. As the likes of Debenhams, House of Fraser and John Lewis all closed outlets permanently, TK Maxx was still looking to expand, mainly through its Home Sense homewares chain, by taking the same “opportunistic” tactic on property as with fashion. “We think of this as a modern-day version of the department store,” says Dolce. The group, founded as TJ Maxx 43 years ago in Massachusetts, and now listed on the New York stock exchange, launched as TK Maxx in the UK in 1994 with a store in Bristol. While many high-street fashion businesses have shrunk, TK Maxx’s sales have risen by more than 30% since 2016, with further growth expected to be announced next month for the year to February, when the company files its UK numbers at Companies House. During that time it has opened 45 TK Maxx outlets and nearly 40 more of its Home Sense homewares outlets, to build a portfolio of 427 UK stores, including 349 of its core chain. All the group’s UK stores have reopened since lockdown, including two new outlets in Uxbridge and York. “Alongside Primark and JD Sports, TK Maxx is one of the winners in clothing in the last five years,” says Patrick O’Brien at retail analysts GlobalData. “It has benefited from a focus on brands and the fact its been able to negotiate deals through a period of immense discounting, when so many retailers have been overstocked. Brands which wouldn’t necessarily have wanted stuff to go in TK Maxx have had to rethink. “It’s not Primark-cheap but there is value in terms of what you think you are getting for the money.” He says the company has struggled to transfer its “treasure hunt” experience online, which may make life difficult during the ongoing coronavirus crisis. But with only an estimated 16% sales via the internet, it still has plenty of chance to expand there. Dolce says TK Maxx shoppers are prepared to queue outside stores as it implements social distancing, because economic pressures mean there is even more appetite for a potential bargain. “The real opportunity for this business is that the quest for value has become very very strong. People are going to be thoughtful about money, having experienced 2020. They don’t want to compromise on quality, so they seek value and that’s our bullseye offer,” she says. Tips for bargain hunters Some stores get daily deliveries during busy periods but most receive deliveries two or three times a week, so speak to staff to get the lowdown on your local. Tuesdays and Thursdays are often mentioned as good days to arrive early for the best deals. TK Maxx fans say its best to keep an open mind and grab a bargain when you see one, rather than seeking out a particular item. But consider what you might pay for that item elsewhere and whether you’re getting inherent quality or a label you’ve never heard of. Product is sourced internationally and sizing can vary by brand, so take a tape measure while fitting rooms are closed under Covid-19 lockdown measures. If you’re an unusual size you may find it easier to find a bargain. If you are interested only in designer labels, head for the 100 stores with Gold Label upmarket sections or look online. Super-bargain hunters should look for clearance stickers, while the eco-minded can donate old clothes in aid of Cancer Research UK at in-store bins. If you think you might want something, don’t leave it on the rail while you ponder. There may be only one of that item in stock, which won’t be replenished.