Staples Inc announces 140 location closures this year
21 Aug 2014
The the world's largest office-supply chain Staples Inc will close around 140 locations this year, as part of a store-closing plan announced earlier, as it responds to online competition the online edition of The Chicago Tribune reported.
The company closed 80 of its North American outlets in the fiscal second quarter. Net income in the three months ended 2 August fell 20 per cent to $82 million, or 13 cents a share, with spend related to closing stores at $101 million, according to the Framingham, Massachusetts-based company's statement.
Expansion by web-based rivals such as Amazon.com Inc had triggered reorganisations across the retail industry, including the merger of stationery suppliers Office Depot with OfficeMax.
The move comes in line with the plans the company announced in March for closing as many as 225 North American stores through next year, amounting to 12 per cent of its outlets in the region, and to cut costs by as much as $500 million.
Chief executive officer Ron Sargent said in a statement, "We have more work to do to stabilize our retail business, and we're taking action to improve customer traffic, reduce expenses and close underperforming stores.''
According to the retalier's projections sales this quarter would decline. The company did not provide any specifics. Earnings excluding some items would be 34 cents to 39 cents a share, the company said.
Analysts projected 37 cents and projected fall in revenue of 3.4 per cent.
Second-quarter earnings excluding some items came in at 12 cents a share.
Revenue in the quarter was down 1.8 per cent to $5.22 billion. The sales declined partly due to earlier shutdowns of outlets and currency effects, according to Staples. North American online revenue rose 8 per cent.
The chain reported a profit of $81.9 million in the quarter, based on revenue of $5.22 billion, although sales fell 2 per cent, Dealer Scope reported.
''We're accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies,'' Ron Sargent, Staples' chairman and chief executive officer, said as part of the announcement.
''At the same time, we have more work to do to stabilize our retail business, and we're taking action to improve customer traffic, reduce expenses and close underperforming stores.''
