Saturday, March 5, 2016

Staples Is Closing Another 50 Stores

(Phil Wahba)  Sales keep slipping.
Office supplies retailer Staples SPLS -1.42% is planning to keep closing more North American stores in 2016, adding to the hundreds of locations it has shuttered in recent years.
Staples, which is in the midst of a battle to win government approval to buy rival Office Depot op , said on Friday it would close 50 of its 1,607 North American stores this year, as it looks to slow declining sales. In the last two fiscal years, Staples closed 242 locations in the U.S. and Canada.
The retailer also reported another disappointing quarter: Same-store sales fell 5%, while Staples’ massive online business provided little relief, rising only 1%. Its services to business segment fell 1.4%. Staples forecast overall sales would again drop in this current quarter, getting the year off to a weak start.
More than a year ago, Staples said it would buy Office Depot in a cash-and-stock deal valued at $5.5 billion. But by December, the Federal Trade Commission sued to block the buyout, prompting Staples to take the government to court. The FTC has said the combined company would create an overly dominant player, cornering some 70% of the corporate services market. Staples countered in court documents that it “competes vigorously” with the likes of Amazon AMZN -0.09% and Amazon Business. A trial is set to start this month.
To mollify the FTC’s and European Commission’s anti-trust concerns, Staples has offered to sell off a huge chunk of its commercial contracts business. It recently won E.C. approval for the deal and sold off $550 million worth of contracts to Essendant.

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