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Staples to close more stores; shares fall

Tags: Staples

Staples Inc. said Tuesday it will strive for growth in a struggling economy by cutting expenses, closing stores, investing in its online unit and implementing leadership changes.

Last month, the largest U.S. office supply chain reported lower-than-expected quarterly results as demand in North America, Europe and Australia weakened. It also cut its full-year profit and sales forecasts.

Staples said it would reduce retail square footage in North America by about 15 percent by the end of fiscal 2015, including closing about 15 U.S. stores. That will result in a pretax cash charge of about $35 million US for its fourth quarter, which ends in January.

The company expects to close some 30 stores in North America, while it also scales down or relocates 30 more.

Staples said 45 stores would be closed in Europe by the end of 2012, and it named a new president for its European operations.

As a result of the international changes, it will take pretax cash charges of $145 million to $195 million by the end of 2012, while it also looks for "additional operational and strategic opportunities for its European operations."

The company said it expected the cost cuts to bring annual savings of about $250 million by the end of fiscal 2015.

Staples and smaller rivals Office Depot Inc and OfficeMax Inc have been looking for ways to reduce costs and increase sales while corporate customers and other shoppers reduce discretionary spending.

The chains also face competition from discounters such as Wal-Mart Stores Inc and online retailer Inc , which can sell the same or similar products at cheaper prices.

Staples is uniting its U.S. retail and businesses and increasing investment in online and mobile units. CTV Two CTV News CTV News Channel BNN - Business News Network CP24