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Macy’s plans to shutter 150 underperforming stores in the next five years is set to be a boon to off-price retailers, according to research from Jeffries analysts and Earnest Analytics. Both firms see the retailers run by off-price conglomerate TJX, particularly its T.J. Maxx banner, as benefiting the most. Competitors as well as other Macy’s stores could grab billions in sales from the closures, according to Jeffries analysts led by Corey Tarlowe.

“Given TJX’s significant customer and real estate overlap with Macy’s, we believe that, over the next 3 years, there will be a few billions of dollars of share gain opportunity,” Tarlowe said in a Wednesday client note.

Some of this has to do with proximity: 63% of Macy’s stores, or nearly 500 locations, operate within a mile of a T.J. Maxx or Marshalls, both run by TJX, according to a real estate analysis from Jeffries. Nearly all of those 498 Macy’s locations had at least one T.J. Maxx or Marshalls within five miles. Put another way, more than 1,000 T.J. Maxx or Marshalls stores sit within five miles of a Macy’s store. Just 12 Macy’s stores do not compete wither either of those retailers within a five-mile radius, according to that research.

The Washington, D.C. area has the most (a 700% overlap), followed by New York (312%) and Massachusetts (306%), Jeffries found. In the U.S., TJX also runs HomeGoods and Sierra.

Moreover, the Jeffries team found commonalities between TJX and Macy’s customer bases. Nearly half of each company’s customers have an annual household income above $100,000, compared to about 30% for Burlington and about 34% for Ross.

According to Earnest credit card data, about a third of Macy’s customers already also shop at T.J. Maxx, Kohl’s and Marshalls. Again, T.J. Maxx is the leader in this metric, with 37% of Macy’s customers also shopping there over the prior 12 months, followed by Kohl’s at 33% and Marshalls at 32%. Just over 25% of Ross Stores customers overlap with Macy’s and 22% of Nordstrom full-line customers do, per that report.

Earnest data shows Macy’s customers dedicate the largest portion of their department store spending at TJX retailers, with 27% share in Q1 this year, up from 25% a year ago. Nordstrom got the next largest share at 21%, while Macy’s itself garnered 15%.

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Macy’s closure plans could fuel what has already been a steady loss of market share to off-price retail. TJX in particular grew its share in apparel and footwear from 12% in 2018 to 16.1% in 2023, with gains each year. Among department stores, Macy’s did build share from 2018 through 2023, but peaked in 2021 at 25.9% and then declined to 25.1% by 2023, according to Jeffries analysts.

Last year, T.D. Cowen analysts said they expected Bed Bath & Beyond closures to also benefit off-price retailers.

“Looking ahead, we believe increased market share-gaining opportunities exist, and TJX should be a beneficiary,” Jeffries said.