Staples Inc, the world’s largest office-supply retailer, said in a statement today that it intends to shut about 140 of its stores in North America this year as increasing online and big-box chains competition hurt its sales.
Mr. Ron Sargent, who is the companys Chief Executive Officer, said: “Were accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies.” He added: “At the same time, we have more work to do to stabilize our retail business, and were taking action to improve customer traffic, reduce expenses and close underperforming stores.”
According to the companys statement, Staples closed 80 of its outlets located in North America during the second fiscal quarter ended August 2nd and expects to close a total 140 during 2014. In March, the office-supply retailer announced its plans to close as much as 225 locations through 2015, which make up 12% of the regions outlets, and cut costs by $500 million.
The company reported a 20% decline in second-quarter net income, which fell from $103 million, or 16 cents per share to $82 million, or 13 cents per share. About $101 million were spent for the reduction of its sales-network.
The company said that its earnings, excluding one-time items, amounted to 12 cents a share. Sales declined by 1.8% and reached $5.22 billion, beating analysts projections for $5.17 billion.
The company has been dealing with stumbling sales, which were affected by increasing competition of online retailers and weaker demand for traditional office supplies. Staples has recently been working on expanding its product offerings and putting efforts into bolstering its online presence.
The company has also been focusing on downsizing locations as some of the newer products it offers, such as mobile devices, take up less space than the more traditional office supplies.
Staples Inc. rose by 0.26% by 13:34 GMT to trade at $11.65 per share, marking a one-year change of -30.82%. The office-supplies retailer is valued at $7.51 billion. According to CNN Money, the 15 analysts offering 12-month price forecasts for Staples Inc. have a median target of $11.00, with a high estimate of $12.00 and a low estimate of $9.00. The median estimate represents a -5.34% decrease from the last price of $11.62.
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