SBAR Report: Peoria Mall

Scott Slepian
December 11, 2019

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As requested, four stores have undergone deep analysis to determine which would be the best fit
to fill in the empty space in Peoria Mall. The stores analyzed were The Gap, Ross, Abercrombie
and Fitch, and TJ Maxx. Based on the performance of these companies, the recommendation at
hand is for Abercrombie and Fitch to take the vacancy at Peoria mall due to the demographic in
Peoria as well as TJ Maxx’s performance of sales.
Situation
A new space is available a mall in Peoria, Arizona. The potential occupants of the vacancy are as
follows: The Gap, Ross, Abercrombie and Fitch, and TJ Maxx. Our firm has been requested to
run an analysis on the current industry and those four retailers in the market. These stores have
been analyzed to determine which would have the greatest success in the Peoria Mall. The
measures of analysis were market shares, sales per square foot, and annual revenue.
Background
Peoria background & trends: The residents of Peoria make slightly more than the rest of the
country, on average. The median household income is nearly $70,000* while the national
average hovers $55,000*. The median property value increased 10% between 2016 and
2017*(*indicates DataUSA). These trends indicate an increase in disposable income for Peoria
residents. As a result, these residents are more able to spend their money at stores within the
mall.
Industry Trends
Family Clothing Stores in USA: In 2019 alone, this industry brought in over $112 billion.
In addition, while many are skeptical about brick and mortar stores due to online shopping, this
industry has an annual growth of nearly 1% each year. While there are nearly 50,000 stores in
this industry, we have analyzed four of the major players: The Gap, Ross, Abercrombie and
Fitch, and TJ Maxx.

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Below we have the industry trend for Family Clothing Stores from 1972-2017 (statista)

Through this trend we can see the increase in sales for the Family Clothing Store industry and
better understand how to capitalize on our opportunity. The next step is to analyze which of the
four companies would best utilize their store space to bring in the most money per square foot.

Company Analysis
TJX Companies: TJ Maxx owns 15% of the current market share. This is the most of the
stores analyzed, and even the most in the whole industry. In addition, they have the highest
annual operating income, which is $2.2 Billion per year. (Ibisworld)
Ross Stores: Ross owns just over 14% of the market, competing very closely with TJX
Companies. Again, they compete closely with TJX with a net income of $2.1 Billion each year
(Ibisworld).
Gap: We see a fall off with Gap’s market share, as it rests at 7.3% of the market share. In
addition, they bring in nearly $580 million each year (Joslin)
Abercrombie & Fitch: Abercrombie owns only .6% of the market share. Their annual
income sits at 75 million (Macrotrends).

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Below we have the sales per square foot for each of the 4 stores

Through this, we can see that TJX Companies and The Gap, Inc utilize their store space best by
having the highest sales per square foot. As a result, we will continue our analysis by eliminating
Abercrombie & Fitch Co. Therefore, we are moving forward with our decision between the Gap,
Inc., TJX Companies, and Ross.

Below we see the industry control for Family Clothing Stores (O’Connor)

This graph allows us to see the market shares for the 3 remaining stores. Since TJX Companies
control the 15% of the market, more than the other 3 companies, and have the highest sales per
square foot, they seem to utilize their space and market most efficiently. We will further our
analyzation between TJX Companies and Ross Stores, Inc.

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The visual below shows the comparison between Ross Stores and TJX Companies (Minutemen)

As seen with this graphic, TJX Companies consistently have a significantly higher annual
revenue than Ross Stores.
Analysis
Through our findings, we see that TJX Companies are the most fit to fill the vacancy in the
Peoria Mall. Due to its high sales per square foot, strong market control, along with having the
highest annual revenue, we are confident that TJX Companies is the best choice among the four
retailers.
Recommendation
After analyzing the background of Peoria as well as the retail industry trends, recommend TJX
Companies should take the vacancy in the Peoria Mall. They are the best option to fill this space
as they will provide for both the most weekly sales and the highest annual revenue. Please
submit the appropriate paperwork by December 15th to ensure your profit for the upcoming year
Filling the vacancy in the mall with TJX Companies will maximize profit compared to the other
companies. Again, confirm this filled vacancy by the 15th to guarantee earnings for next year. If
there are any remaining questions, please refer them to askme@employee.com by Friday so that
we can get this project started before shopping season is upon us.

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Bibliography:

“Abercrombie & Fitch Net Income 2006-2019: ANF.” Macrotrends,

www.macrotrends.net/stocks/charts/ANF/abercrombie-fitch/net-income.

DataUSA. “Peoria, AZ.” Data USA, datausa.io/profile/geo/peoria-az.

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

IBISWorld, Inc. “Industry Market Research, Reports, and Statistics.” IBISWorld, 2019,
clients1.ibisworld.com/reports/us/industry/majorcompanies.aspx?entid=1069#MP9906.

Joslin, R., Lueck, P., Martino, C., Rhoads, M., Wachter, B., Chapman, R., & Christian, G.
(2010). Gap, Inc.: Has the Retailer Lost Its Style?. Understanding Business Strategy:
Concepts and Cases, 1-18.

Minutemen. “It's On... TJX Companies Vs. Ross Stores Inc: The Super Bowl Of Discount
Retailers.” Seeking Alpha, Seeking Alpha, 6 Oct. 2014, seekingalpha.com/article/2541705-
its-on-tjx-companies-vs-ross-stores-inc-the-super-bowl-of-discount-retailers.

O'Connell, Liam. “Family Clothing Store Sales U.S. 1992-2017.” Statista, 23 Apr. 2019,
www.statista.com/statistics/197648/annual-family-clothing-store-sales-in-the-us-since-
1992/.

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