Staples to close stores, cut costs, boost online presence
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.-based company is looking to save $250 million, before taxes, by the end of fiscal year 2015. At that point, Staples said it intends to have shaved down its retail square footage by 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 shutter 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 where the stores slated for closure are located. Company representatives could not be reached for comment.
The turnaround plan could result in charges up to $1.12 billion, pre-tax, for the company, which is trying to invest more in its Internet and mobile operations and better integrate its retail and online offerings.
The company, already one of the largest retailers online, 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 rumors earlier this month that several private equity firms, including original investor Bain Capital, are eyeing Staples as an acquisition target.
Currently, the company 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.
The company’s stock on Tuesday dipped as much as 7.6% and was down about 4.5%, or 55 cents, at $11.80 a share in late-morning trading in New York.
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