Staples Announces Plans To Close 70 Stores In North America
Staples Inc. is a widely known office supplies store throughout North America, but unfortunately the company’s shares have fallen as much as 7.4 percent in early trading. After posting poor results the company announced plans to close 70 stores in North America.
The company said on Thursday that same-store sales in the region fell seven percent during the fourth quarter. Analysts predictions were a penny more than the earnings brought in in the period.
The Framingham, Massachusetts-based company’s plan to close stores comes after 48 locations were already eliminated in 2016 and will affect about five percent of stores in North America.
There are 1,255 locations in the U.S. and 304 in Canada. However, reducing its store count is part of the company’s plan to get away from traditional brick-and-mortar retail. Instead Staples is hoping to sell more business services and connect with more customers online. In addition to all of this, the company offloaded its retail business in the U.K. last quarter.
The announcement comes almost a year after Staples’ attempted to acquire Office Depot Inc. but failed to do so. The merger was blocked by federal regulators on antitrust grounds last May, because it would “hurt business customers.” That failed attempt resulted in the company searching for a new growth plan.
Due to the deal not going through the Chief Executive Officer Ron Sargent resigned and stock sputtered. In September Shira Goodman, who was serving as interim CEO, was named the permanent CEO.
Staples Inc. took on a new strategy in October to license its name and get more revenue from business services. The company said earnings will be 15 cents to 18 cents a share in the first quarter, excluding some items.
There are 10 Staples stores in Tampa and 10 stores in Orlando.
Just last month another retail company announced its closure. Gander Mountain Co. reported it was in the process of filing for bankruptcy.