(Matt Townsend) Staples Inc. (SPLS:US) will
shut about 140 locations this year, part of a store-closing plan
announced earlier, as the world’s largest office-supply chain responds
to online competition.
Staples shut 80 outlets in North America in
the fiscal second quarter. Net income in the three months ended Aug. 2
dropped 20 percent to $82 million, or 13 cents a share, as $101 million
was spent on closing locations, the Framingham, Massachusetts-based
company said in a statement today.
Expansion by Web-based rivals such as
Amazon.com Inc. has spurred reorganizations across the retail industry,
including the merger of stationery suppliers Office Depot Inc. (ODP:US) with
OfficeMax Inc. Staples outlined plans in March to shut as many as 225
North American stores through next year, amounting to 12 percent of its
outlets in the region, and to reduce costs by as much as $500 million.
“We have more work to do to stabilize our
retail business, and we’re taking action to improve customer traffic,
reduce expenses and close underperforming stores,” Chief Executive
Officer Ron Sargent said in the statement.
Staples fell 2.6 percent to $11.32 at the close in New York. The stock has declined(SPLS:US) 29 percent this year, compared with a 7.5 percent gain for the Standard & Poor’s 500 Index.
The retailer forecast sales this quarter will
decline, without providing specifics. Earnings excluding some items
will be 34 cents to 39 cents a share, the company said. Analysts
projected 37 cents and estimated revenue to fall 3.4 percent.
Second-quarter earnings excluding some items were 12 cents a share, matching the average of 17 analyst (SPLS:US) estimates compiled by Bloomberg.
Revenue in the quarter fell 1.8 percent to
$5.22 billion, beating analysts’ expectations for $5.17 billion. The
sales declined in part from earlier shutdowns of outlets and currency
effects, Staples said. North American online revenue increased 8
percent. Annualized cost savings so far this fiscal year totaled $150
million.
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