00:00If you're looking for a Gucci bag, don't skip TJ Maxx, known as TK Maxx here in the
00:05UK. It's quietly become a force in luxury retail, but that strategy has its risks for
00:11the store and the high-end labels it's pushing. First, where is it all coming from? TJ Maxx
00:17takes advantage of department stores cancelling orders and brands clearing end-of-season lines.
00:24But also, designers have a lot of leftovers after a three-year sales slump, although most
00:29don't have a direct relationship with TJ Maxx. An average price increase of about 60% on
00:36luxury goods since 2019 has left many people unable to afford them. And luxury brands don't
00:42always want to sell on discount themselves. It dilutes their exclusivity. Since destroying
00:48overstock is banned for large companies in Europe, where many luxury design houses are
00:53based, excess supply has to go somewhere. And that's not so bad. If young shoppers find
00:59something they like in TJ Maxx, they could go on to buy from the designers later on. Like
01:05this Prada sweater. It retails for just under £2,300. Here, it's less than £400. But there
01:14are downsides. Luxury labels having too much stock in discounters can cheapen their image.
01:20At TJ Maxx, people want to hunt for bargains. Too many expensive items can change the store's
01:27appeal and even push shoppers to rivals. But perhaps the biggest danger for TJ Maxx is that
01:34luxury finally gets its act together. The likes of Louis Vuitton and Gucci are trying to win
01:40back middle-class customers with things like lipsticks and even cheaper handbags. They're
01:45also trying not to have too much stuff left over. That could mean fewer posh names available
01:51in TJ Maxx. So get that cut-price Gucci handbag while you can.
01:56I'm sorry.
01:56I'm sorry.
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