Office Depot To Close 300 Stores

Office Depot will close 300 stores over the next three years as the office superstore continues to implement cost saving programs following the failed acquisition attempt of the company by Staples.

Specifics on the locations involved in the latest store closure plan were not immediately available. The company recently completed the first phase of its U.S. retail store optimization plan launched in 2014 that led to the closure of 400 Office Depot locations.

“The initiatives we announced today are a result of our comprehensive strategic business review which is now substantially complete,” said Roland Smith, chairman and CEO of Office Depot. “In the near term, we remain focused on executing our critical priorities, completing the OfficeMax merger integration, implementing our new cost saving programs, and returning capital to shareholders.”

As the retailer moves forward with its latest plan to shut stores, the company is also looking to expand a pilot program to a total of 24 stores by the end of this year, with 100 stores targeted for 2017.

According to the company, this pilot program features stores that offer a smaller 15,000 square foot footprint and is designed to provide customers with an enhanced shopping experience including a curated assortment of products and expanded services.

Office Depot officials also announced results for the second quarter ended June 25. Total reported sales for the quarter were $3.2 billion compared to $3.4 billion in the second quarter of 2015, a decrease of 6%. Operating income was $253 million and net income was $210 million, or $0.38 per share. In the second quarter of 2015, the company reported an operating loss of $51 million and a net loss of $58 million, or $0.11 loss per share.

Sales in the company’s North American business solutions division were down 7% year-over-year, while North American retail division sales were $1.2 billion, also down 7%. Same-store sales in the quarter were off 1%.

In its international division, sales were down 4% for the quarter. Office Depot officials said the company is exploring strategic alternatives regarding its European business that includes a possible sale.