Staples seeks to cut $250 million a year in costs
Staples Inc. is speeding up store closures, shaking up management and boosting its online business as the office-supply chain implements a multiyear plan to cut costs.
The Framingham, Mass., company is looking to save $250 million annually by the end of fiscal 2015. At that point, Staples said, it intends to have shaved its retail square footage 15%.
For now, the chain is looking to accelerate the shutdown of 15 U.S. stores. By the end of its fiscal year, Staples said it expects to have 30 net store closures and 30 downsized or relocated stores in North America. The chain will also close 45 European locations as well as some of its European delivery businesses.
The company is also hoping to sell its European printing systems branch.
Staples did not divulge which stores were slated for closure. Company representatives could not be reached for comment.
The turnaround plan could result in charges of up to $1.12 billion for the company. Executives hope the plan will allow Staples to invest more in its Internet and mobile operations, and better integrate its retail and online offerings.
The company, already one of the largest online retailers, said it is “significantly expanding its assortment beyond office supplies to better serve the needs of business customers.”
Staples’ U.S. Retail and Staples.com businesses will combine under one executive, Demos Parneros. The company also reorganized some of its international manager positions.
The shifts come amid speculation this month that several private-equity firms, including original investor Bain Capital, are eyeing Staples as an acquisition target.
Staples has 88,000 employees worldwide and operates more than 2,000 stores in 26 countries.
Staples’ most recent quarter, which ended July 28, was disappointing. The company lowered its earnings outlook as net income slipped 31.7% to $120.4 million, or 18 cents a share. Sales slumped 5.5% to $5.5 billion.
