Staples Inc, the largest U.S. office supplies retailer, forecast a fall in current-quarter sales as it loses customers to mass market chains and e-retailers, and the company said it would close up to 225 stores in North America by 2015.
Staples’ shares fell 9 percent before the bell, after the company also posted lower-than-expected fourth-quarter results and forecast current-quarter profit below analysts’ estimates.
The company operates 1,515 stores in the United States and 331 stores in Canada.
Staples said it had initiated a multi-year cost reduction plan that was expected to generate annualized pretax cost savings of about $500 million by 2015.
Rival Office Depot Inc (ODP.N) said last week that it expected sales to continue falling in 2014, after reporting a surprise quarterly loss.
Staples and Office Depot have been struggling to keep shoppers from turning to mass merchants such as Wal-Mart Stores Inc (WMT.N) and online retailers like Amazon.com Inc (AMZN.O).
Staples has been shifting its focus to new categories such as tablets, breakroom supplies and copy and print services from traditional office supplies such as paper and toner.
It has also increased the number of items it sells online.
Shouldn’t we be a little past the point of blaming Wal-Mart and Amazon every time a retailer struggles? It’s not as if we are in the first year or so of this crazy Internet phenomenon or Wal-Mart’s business model is sneaking up on anyone.
There is probably plenty of discussion to be had about the lack of adaptability and forethought exhibited by Staples upper management. Mentioning that you’re increasing the number of items you sell online in 2014 almost sounds like a quaint quote from the past, after all.
Maybe we should take a look at the fact that, despite whichever numbers might uptick for a month or two, this economy has been mired quicksand for a long, long time. There is also the overwhelmingly negative impact that Obamacare is having, and will continue to have, on small and medium sized business, or the kinds of customers who made companies like Staples huge in the first place.
As a self-employed, small business person who has shopped at places like Staples and Office Depot for years, as well as a frequent Amazon shopper, I can honestly say that all of the money I used to spend at Staples isn’t going to Amazon. It’s not going anywhere.
Because it doesn’t exist anymore.